Netflix had a less-than-stellar quarter, bringing in just 2.7 million subscribers worldwide against a projected 5 million. The streaming service lost subscribers in the U.S. for the first time in nearly a decade, and with that particular market hitting a saturation point, Netflix is increasingly looking to other regions for growth.
India is an obvious market just because of its sheer scale, and although Netflix made its debut in the market three years ago, it hasn't gained much momentum in the country. A lot of that has to do with the pricing: Netflix's most affordable plan in India cost ₹499 ($7.25), putting the service out of reach of most potential customers. To put things into context, Hotstar — India's leading video streaming platform — costs ₹999 ($14.50) a year, providing unlimited access to its catalog in HD as well as live sporting action. A Prime subscription costs the same amount, and you get two-day deliveries on Amazon along with free access to Prime Video.
Netflix is now looking to amend the situation by rolling out a mobile-only plan for customers in the country. The plan costs ₹199 ($3) a month, and lets users stream SD content on one mobile device or tablet. That's less than half of the cost of the Basic plan, but there's a caveat: if you're on the mobile-only plan, you won't be able to cast content to another device.
The $3 mobile-only plan is Netflix's best bet for making inroads into the Indian market.
That said, it is a smart move by Netflix to roll out a mobile-only plan in India. After all, India is a mobile-first market, and a vast majority of multimedia consumption happens on smartphones. Netflix is well aware of that fact, as it mentioned that as a percentage, more people sign up from mobile from India than anywhere else in the world, and that more members stream content from mobile devices than any other market.
In that setting, it's obvious that Netflix chose India as a testbed for its mobile-only plan. The service trialed the plan in the country earlier this year, and new members can now opt for the tier. While there's no option to cast or mirror content to another device, you do get to download your favorite TV shows and movies for offline viewing, and the plan works on tablets as well.
From Netflix's director of product innovation Ajay Arora:
Our members in India watch more on their mobiles than members anywhere else in the world- and they love to download our shows and films. We believe this new plan will make Netflix even more accessible and better suit people who like to watch on their smartphones and tablets—both on the go and at home.
In short, this is Netflix's first aggressive push into the Indian market, and the service is betting that the affordable pricing combined with its foray into original programming in the region will allow it to finally pick up some subscribers. The mobile-only plan is rolling out just in time for the second season of Sacred Games — Netflix's first Hindi original series — which will debut on August 15, India's Independence Day.
Netflix will undoubtedly be pushing the mobile-only plan to prospective customers in tier 2 and tier 3 cities ahead of the upcoming season. In the Q2 2019 earnings call, Netflix's chief content officer Ted Sarandos said that India is a long-term play, with the service investing a lot of money in original content tailored for the region:
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.
That's a good thing, because even at ₹199, Netflix is the costliest video streaming service around. Then there's the fact that the mobile-only plan is limited to streaming in standard definition, with other services providing HD streaming at a lower price. Netflix is betting on its original programming to be the differentiator, and we'll have to wait and see if that move pays off. For now, this is a step in the right direction.
