Netflix announces mobile-only subscription at Rs 199 to woo millennials

In what seems to be in line with Reliance Jio disruptive foray into telecom sector, US-based streaming giant Netflix has announced a mobile-only cheaper subscription plan at Rs 199 for Indian smartphone users.

The streaming firm strongly believes that the plan will help it draw more users on to its platform.

The mobile-only plan, which will be live for users on the mobile app from Thursday, will allow the user to view content on only a single screen. The plan will have standard definition content at 480p resolution, not 720p or higher resolution content.

Netflix, for the past couple of months, has been testing price packages plans ranging from Rs 65 per week to Rs 250 per month.

The move by the streaming giant is considered a masterstroke, especially looking at the price-sensitive nature of Indian users, who are deemed to value entertainment content.

This is an aggressive move by Netflix.

Much like Reliance Jio foray into telecom sector about three years ago that forced all other existing telcos to revise their strategy, Netflix move is also set to trigger a price war in OTT space in India. As per industry observers, it will intensify the competition among OTT players and force them to revise their pricing.

Netflix mobile-only offer is second cheapest subscription plan by OTT players in the country.

"A big chunk of entertainment watchers especially youngsters consume only on a mobile. Ninety-five percent of my YouTube channel traffic only comes from mobile. It is a great way to bring them in. They would have not paid 700 per month. It’s too expensive for them," said Vivek Lath, Managing Director at GoQuest Media Ventures.

Among its rivals, Star-owned and home-grown Hotstar subscription monthly plans start at Rs 299 per month. Whereas Amazon offers similar services at Rs 129 every month.

Other players in the segment such as Zee-owned ZEE5 and ALT Balaji streaming services also have cheaper plans starting at around Rs 100.

Currently, Netflix runs three regular plans in India. First is the basic plan, which involves viewing on a single screen, for which the user needs to pay Rs 499 every month.

Second, a standard plan which costs Rs 649 per month, and lastly there’s a Premium plan for which the user has to pay Rs 799 per month, in which user gets to watch on four screens.

Interestingly, Netflix regional content is still its weak point

Netflix is said to have around 500K paid subscribers at present on its platform in India. If marketed along with equally good content, this plan might take the firm to a new height in terms of user-base.

Netflix has a close competitor in Hotstar. The Star-owned firm, which offers yearly subscription starting at Rs 999, has about 7 lakh paid subscribers.

Though, Netflix, as per Kalagato report, earns more per user than Hotstar annually. US-based streaming firm earns over 20 times more money per user than home-grown video streaming platform Hotstar.

India is an important market for the streaming platform.

In 2018 Netflix chief product officer Greg Peters had said that the company will keep experimenting with other pricing models. According to him, India in coming years will contribute majorly in its International subscriber base.

As per Limelight Networks, the highest per capita consumption of videos take place in India. The OTT market is still at the nascent stage in the country. As per Ashocham-PwC joint study, Indian OTT market is expected to touch $823 million at CAGR of 22.6% by 2022.

Netflix eyes a piece of this greater pie. In the coming years, it plans to add around 100 million subscribers from India alone.

With the latest announcement of the lower-priced subscription plan, Netflix certainly is inching towards that goal.