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Netflix tries to end its subscriber problem with $3 mobile plan for India

Posted at 5:44 AM, Jul 24, 2019
and last updated 2019-07-24 07:59:47-04

Indian streaming fans are being offered the world’s cheapest Netflix subscription as the company tries to capture a bigger slice of the country’s 400 million smartphone users.

The new subscription, available only to Indian mobile customers, will cost 199 rupees ($2.88) a month. That’s less than half the price of its cheapest existing plan in India, and a third of the least expensive US subscription.

Netflix customers in India watch a higher percentage of videos on their phones than anywhere else in the world, and a greater proportion of Indian customers sign up to the platform via mobile than any other country, Ajay Arora, Netflix’s director of product innovation, said Wednesday.

“We want to really broaden the audience for Netflix, want to make it more accessible, and we knew just how mobile-centric India has been,” he told reporters in New Delhi.

The push to widen its audience in India, which now has more smartphone users than the entire population of the United States, comes a week after Netflix reported lower-than-expected subscriber growth.

The company gained 2.7 million new users in the quarter ended June, much lower than the 5 million figure analysts had forecast. Its profit for the quarter also dropped to $271 million, down from $384 million last year.

Netflix stock has plunged more than 15% since the earnings report last Wednesday.

Things are about to get tougher for the online streaming giant, which will soon face new rivals in its home market.

Disney will roll out its new streaming service in North America on November 12. Apple, NBCUniversal and AT&T’s WarnerMedia — the parent company of CNN — are all set to premiere new services in the next year.

India has long been a coveted prize for Netflix, with CEO Reed Hastings predicting last year that its “next 100 million” subscribers would come from the country. The streaming service has commissioned dozens of Indian original movies and TV shows in recent months as it tries to broaden its footprint.

The South Asian nation has more than 600 million internet users — second only to China — with close to 800 million people yet to come online. And it has seen an explosion in smartphone usage thanks to lower device costs and some of the world’s lowest mobile data prices.

But India is a very price sensitive market, with an average annual wage of less than $2,000. Competitors like Hotstar (which is owned by Disney) and global rival Amazon Prime Video had been offering cheaper plans than Netflix. Some even have free versions of their platforms in India.

The new subscription will help Netflix compete on price. Arora said the company spent several months testing a price point of 250 rupees ($3.62) but decided to slash the price even further before rolling it out.

Arora said the company is also testing a similar plan in Malaysia and other Southeast Asian countries, but did not reveal a timeline for expanding it further.