Netflix to experiment with lower pricing models in India
MUMBAI: Video streaming giant Netflix is planning to experiment with lower pricing models for the Indian market as part of its ambitious target to acquire the next 100 million subscribers from the market.
Currently, Netflix has three monthly subscription plans in India priced Rs 500 (basic), Rs 650 (standard HD), and Rs 800 (ultra HD). The streaming platform will come up with new plans which sits below its lowest subscription plan of Rs 500.
Apart from tweaking pricing, the streaming giant will also forge distribution partnerships with telcos and TV distributions platforms to widen its reach.
Netflix has partnerships with direct to home (DTH) platforms like Airtel Digital TV, Tata Sky and Videocon d2h, which has since merged with Dish TV. It has also inked deals with the three big telcos Airtel, Vodafone-Idea and Reliance Jio.
“Now we’ll experiment with other pricing models, not only for India, but around the world that allow us to sort of broaden access by providing a pricing tier that sits below our current lowest tier and we’ll see how that does in terms of being able to accelerate our growth and get more access. But even on the existing model, we feel like we have a long runway ahead of us in India,” Netflix chief product office Greg Peters said during earnings conference call after Q3 results.
He further stated that Netflix has increased partnerships is working on improving the product experience.
Netflix co-founder and CEO Reed Hastings said that the platform will be expanding beyond English and Hindi into regional languages. Hastings added that the platform will takes it own time to reach the 300 million smartphone users in the country.
“We’ll go from expanding beyond English into Hindi and then into many more languages, more pricing options, more bundling, all of those things are possible. There are over 300 million mobile phone subscriptions or households that are almost twice that in mobile phone subscription. So there’s a huge market and people in India like around the world love watching television. Now, we’ll take one million out of time and figure out how to expand the market as we grow,” Hastings stated.
Netflix launched its first original show in India with ‘Sacred Games’ followed by ‘Lust Stories’ and ‘Ghoul’. It has also released a movie called ‘Love Per Square Foot’.
The platform is currently working on a coming-of-age drama ‘Selection Day’ which will release globally on 28 December. ‘Selection Day’ is produced by Seven Stories and Anil Kapoor Film & Communication Network and is based on Aravind Adiga’s novel of the same name.
Netflix CFO David Wells stated that while India holds a lot of potential for the platform it is also one of the toughest markets to be in. “We’re super encouraged with India and the growth that we’ve got early on, but we know it’s going to be somewhat of a tough market, right. So there’s – that notion is along – is a million at a time, right. It’s not going to be overnight where we’re going to get to those higher numbers.”
Meanwhile, Netflix’s streaming revenue grew by 36% year over year in Q3 to $3.9 billion, as average paid membership increased by 25% and ASP rose by 8%. International revenue included a -$90 million year over year impact from currency, excluding the impact of F/X, international ASP rose 11% year over year and 2% sequentially.
This quarter the platform under-forecasted it memberships as its registered total net additions of 7 million (up 31% vs. 5.3 million last year) which was higher than their forecast of 5 million, representing a new Q3 record. The variance relative to forecast was due to greater-than-expected acquisition globally, with strong growth broadly across all their markets including Asia.
For Q4, the platform has forecast paid net additions of 7.6 million, and total net additions of 9.4 million, up 15% and 13% compared with 6.6 million and 8.3 million in Q4 last year.