Streaming giant Netflix hasn’t made much headway in India, a country from where it’s eyeing its next 100 million subscribers.
“In every other major market, we've got the flywheel spinning. It frustrates us that we haven't been as successful in India yet,” Netflix co-founder Reed Hastings said in an earnings conference call on January 20. He, however, added that the company is “definitely leaning in there”.
This comes weeks after the Los Gatos, California-based streaming major slashed its prices in India. In December 2021, the company reduced its prices by 25% for the first time since 2016, the year when it entered the Indian market.
Its cheapest mobile-only plan now starts at ₹149, instead of ₹199 earlier. The company, which is exploring ways to appeal to a broader number of people, had introduced its mobile-only plan in July 2019 as a large chunk of Indians consume content on mobile devices.
Its ‘Basic’ plan, which allows users to stream in standard definition (SD) resolution on a single mobile, tablet, computer or television screen, now costs ₹199 per month as against ₹499 earlier. The company’s ‘Standard’ subscription, which offers high definition (HD) content along with support for two concurrent screens, has been cut to ₹499 per month from ₹649 earlier.
The streaming service's most expensive ‘Premium’ plan, which offers ultra high-definition (Ultra HD) content with support for four concurrent screens, is now priced at ₹649 per month, down from ₹799 per month.
Responding to a question on what the company could do to succeed in India, Hastings says, “It would be a long time before we materially change our strategy. Our experience in Brazil was brutal the first couple of years.”
The average price for cable in India is $3 per month, he says, adding it's a very different pricing environment.
Netflix COO Greg Peters, however, sounded confident that the company can get things right in India over time. “Japan was also a very difficult market early on before paying off.”
India has the world’s second highest number of internet users after China, with around 570 million internet subscribers, growing at a rate of 13% annually, according to an EY report.
This was mostly aided by Reliance Jio’s entry in the telecom industry in 2016. With the help of Jio’s dirt cheap data plans, India went from being one of the world’s most expensive data regimes to the most inexpensive in just four years.
“The impressive scale of the market and a liberal foreign investment environment are attributes that appeal to global streaming platforms looking to capitalize on the country’s fast-growing digital consumption,” says the EY report.
But the US entertainment giant has been struggling to add subscribers amid stiff competition from rivals. According to research company Media Partners Asia, Netflix had some 4.6 million subscribers in India in 2020 compared with Amazon Prime’s 17 million and Disney+Hotstar’s 26 million.
“We have original content coming out from all corners of the world, and that's driven international growth. We expect it to in India as well,” says Netflix co-CEO Ted Sarandos.
Netflix added 8.3 million subscribers globally during the October-December quarter, taking its total paid memberships to 222 million. In 2021, it added only 18 million subscribers compared with 37 million a year ago.