Netflix hasn’t had as many takers in India as it would like. Since the streaming entertainment giant’s entry into the country in 2016, it seems Netflix has got competition from India’s cable TV network.
Seeking to gain a foothold in the country amid intense competition, the platform slashed its India pricing for the first time in December with the entry-level plan now available at Rs 199 per month compared with Rs 499 per month previously.
India has been a tricky market to crack, a report in Moneycontrol noted, quoting Netflix cofounder Reed Hastings as admitting during an earnings conference call on January 20: “In every single other major market, we’ve got the flywheel spinning. The thing that frustrates us is why haven’t we been as successful in India. But we’re definitely leaning in there.”
He further observed that “what’s unique about India is cable. It is about $3 (Rs 223) per month per household, which is radically different pricing than the rest of the world, which does impact consumer expectations”.
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According to Netflix COO Greg Peters, it was the right time to decrease prices in India. “We also wanted to do it across the range of plans that we had under the theory that some of those features like the ability to watch on TV with a basic plan really unlocks more value in the service and therefore, would create more retention, more attractiveness. While we decrease ARM, (average revenue per member) as a result of the price decreases, we’re going to make it up in more subscriber adds (additions),” he reportedly said, adding that “some of these effects, like retention, take a couple of months to get a very clean read on it”.
According to the Moneycontrol report, Asia is the smallest region for the company, trailing North America, Latin America and Europe. The region’s 32.6 million subscribers account for 14.7 per cent of the service’s overall 221.84 million members.
A recent report by independent research and consulting firm Media Partners Asia projected the service’s subscriber base at 5.5 million at the end of 2021. The firm noted that while Netflix has only 5 per cent of the total streaming service subscribers in India, it leads in terms of subscription video-on-demand revenue with a 29 per cent share.
Netflix added 8.3 million members during the fourth quarter while net annual member additions dropped to 18.2 million in 2021, which is 50 per cent lower than the record 37 million added in 2020.