Netflix confirms roll-out of lower-priced mobile-screen plan in India

MUMBAI: Video streaming platform Netflix has confirmed plans to roll-out a lower-priced mobile-screen plan in India to expand its user base in the price-sensitive market.

The company said that the lower-priced mobile-screen plan will roll-out in Q3. Netflix argued that rolling out a lower-priced plan makes sense since the pay-TV ARPU in India is low at below $5.

Earlier, Netflix had stated that it is experimenting with a low-cost mobile-only subscription at Rs 250 per month with the selected user. This is half of the Rs 500 that the streaming platform charges for its base subscription pack. The mobile-only plan allows subscribers to watch standard definition (SD) content on a single mobile or tablet screen at a time.

“After several months of testing, we’ve decided to roll out a lower-priced mobile-screen plan in India to complement our existing plans. We believe this plan, which will launch in Q3, will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where Pay-TV ARPU is low (below $5). We will continue to learn more after the launch of this plan,” Netflix said in its Q2 results announcement.

Speaking with analysts post the announcement of Q2 results, Netflix chief product officer Gregory Peters said there is an opportunity to broaden the access to the service in the Indian market through the new plan. He also said that the company is working on partnerships in the market to improve accessibility.

“So as we’re expanding that content offering and seeing that engagement grow, we think that there’s an opportunity then to be able to broaden the access to the service and so more people can enjoy that increasingly relevant content offering. So that’s clearly the motivator behind adding this mobile tier offering, which we think — it’s going to be a lower price point. In a market where the typical pay-TV package is under $5, we think we need to have a lower price offering to improve the accessibility, but also one that complements the existing tiering structure that we have,” Peters stated.

Netflix chief content officer Ted Sarandos said that the platform has announced five new originals for India. Sarandos further stated that the platform is particularly excited about the original series based on film franchise ‘Baahubali’. The series, Sarandos said, will mark Netflix’s first step into a large-scale Indian original film.

“It’s based on a film that was hugely popular a year ago, and this is a series prequel/sequel model that we think is going to be incredibly popular in India. And we’ve been seeing steady — nice steady increases in engagement with our Indian viewers that we think we can keep building on. Growth in that country is a marathon. So we’re in it for the long haul and we’re seeing nice steady progress,” he added.

Netflix also reiterated that remaining advertising-free will remain a deep part of its brand proposition. “When you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction,” the company said in its letter to shareholders.

In Q2, Netflix saw less than expected addition of paid membership. The platform’s paid membership grew by 2.7 million, less than the 5.5 million in Q2 a year ago and its own 5 million forecast.

In Q3, it expects the paid membership to grow by 7 million, more than the 6.1 million in Q3 a year ago. It further stated that consumers around the world continue to move from linear television to internet entertainment at a remarkable rate.

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