CHANGES ARE COMING!!!
Netflix Inc., whose shares plunged after it reported the worst drop in U.S. users since 2011, is looking for new subscriber growth in India, a rapidly expanding streaming market. But one of the biggest hurdle in gaining new subscribers is the many local OTT platforms who are constantly trying to do the same, with their many schemes, targeted shows and mainly cheaper tariffs. Already wrestling with global giants such as Walt Disney Co. and Amazon.com Inc., Netflix now also contends with broadcasters and Bollywood powerhouses allied with billionaire-backed wireless carriers, who are luring users with free offers or as low as 40 cents a month.
Netflix has lost approximately 130,000 subscribers in America this quarter which makes “winning” in India even more important for them. Their shares also fell almost 10%, the most in three years which knocked more than $16 billion dollars of its market value. While it’s a known fact that this industry is only going to grown larger in India especially with the growth of number of smartphone users in the country, everyone from the small players to the big players are fighting for a big chunk of this cake. Netflix will probably almost triple subscribers in India this year to 4.1 million, within striking distance of Amazon Prime’s 4.4 million, according to estimates.
While Netflix is in its own dilemma and trying to do it’s best to increase the subscriber base and increase investment, Indian rivals including Zee Entertainment Enterprises Ltd. and Balaji Telefilms Ltd. are betting on bundling their content with mobile phone services.
One of the biggest issues for Netflix in India has been the pricing. It is currently the most expensive OTT service provider in India and the world. This is one thing that could probably put off a lot of potential subscribers. But now they have confirmed that they will soon launch a low-priced mobile plan in India to offset lower growth worldwide. This new mobile-only plan is likely to be launched in the third quarter in India and could potentially be a game changer for them. It is said to be much lower compared to its existing plan and two months ago in this same column I had discussed as well how they are testing a INR 250 per month scheme for mobile devices in India.
Besides this, at least one lesser known fact is also that, they have also partnered up with Hathway for their Hybrid (Android STBs) where they offer the people who buy these hybrid boxes a discount of INR 1000, meaning, you get one month free trial and on top, if you say take the existing 650 plan, you get INR 500 off for the 2 months after the free trial. Again, this is a great offering with a bid to improve their hold on the Indian OTT market.
It is really important to set the prices according to the audiences and it’s a great first step towards a proper and a much more acceptable pricing setup by Netflix. But with Disney again coming out with its OTT and with the already existing platforms it’s going to get really hard for the people to subscribe them all especially with the prices that they have to offer. I hope it doesn’t turn out to be one of those things where our mothers used to tell us, “we can’t always have too many nice things in life.” But maybe we can, if it’s affordable and we can afford it all. But just maybe.
By – Amul Vikas Mohan