Netflix slashes prices by up to 60% in India as competition intensifies

Just a day after Amazon Prime Video has hiked its subscription rates by up to 50% from Rs 900 to Rs 1,499 for annual membership, Netflix has announced price cuts across its subscription plans, with the steepest cut of 60% in its Basic plan from Rs 499 to Rs 199. This is the second time that Netflix has done this in India, earlier this year they announced a plan of Rs 199 per month (mobile only) for India market. This plan has also been slashed to Rs 149, a decrease of 25.12%.

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With these price cuts, Netflix is now almost on par with Disney+ Hotstar. The price change will happen from today (December 14, 2021) and will come into effect from the next billing cycle for members.

“As Indians, we love great entertainment. Whatever your mood, tastes or plan, Netflix is now even more accessible. Whether you choose ‘Aranyak’ on Friday, ‘Money Heist’ on Saturday, ‘Dhamaka’ and ‘Sooryavanshi’ on Sunday, you can watch all of Netflix on your mobile for Rs 149, and on any device starting at Rs 199,” said Monika Shergill, VP - Content, Netflix India.

In a release issued, the OTT platform stated, “We have reduced our prices from 18-60% across different plans so that even more audiences in India can enjoy all the great stories on Netflix.”

If one is already a Netflix member on its Mobile, Basic or Standard plan, the OTT platform will upgrade the customers to the plan that is one tier higher than their current plan, at the same monthly price that they pay for Netflix today. Next time the customers are on Netflix, they will receive a notification on their device, where they can choose ‘Confirm Upgrade’ to use the plan or choose any other plan that they wish.

Commenting on the price cuts effected by Netflix, Karan Taurani, Senior Vice-President, Elara Capital, noted, “Netflix has ~36% market share in India’s SVOD market, as it remains to be the most dominant player in pureplay video OTT service. Average pricing for OTT apps in the country today for annualised plans, basis total subs revenue/ number of subs is around Rs 500; Netflix pricing even in the basic plan is still almost 3x of the above price (Rs 1,800 now). Netflix has almost 214 million paid subscribers; larger portion of this is from developed nations which are largely penetrated. Hence, India offers a big opportunity for Netflix if they were to scale up the subs base.”

With almost 90% of the SVOD revenues in India flowing through bundles, Netflix has also adopted the bundle model in India with various telcos. “India is a big market opportunity with ample penetration opportunity in the Tier 2/3 towns, increased smartphone users and cheaper data price. This is indeed a market which will help scale up Netlflix subs base over medium to long term,” opined Taurani.

He further said, “Netflix going a larger target audience and making their service more affordable, will indeed be a negative for broadcaster OTT apps as competition intensifies, and this may also keep a check on their ARPUs (in case they have plans to increase the same – Disney + is almost on par with Netflix now with this new plan); it will also lead to sharp increase in content cost, as we expect content cost to move up almost 30% annually over next two years as existing apps spend more and more new OTT apps emerge.”