One of the world’s leading over-the-top video streaming platform, Netflix, is testing long term subscription plans in India, according to media reports.
According to an ET report, Netflix is planning to introduce term subscription plans to attract new subscribers for its video streaming services. As part of this pilot, Netflix is selling three, six, and twelve-month plans to new users at a discounted rate, with savings ranging from 20% to 50%.
The decision comes on the heels of Netflix chief executive Reed Hastings announcing that the company is set to invest INR 3,000 Cr by 2020 for creating more India-focussed content.
Revealing more about Netflix’s pilot project, a company spokesperson said that this is a test and it will only introduce it more broadly if people find it useful.
The release of the test with such plans for Netflix also comes in lines with chief product officer Greg Peters, in October 2019, saying that the company will be exploring different pricing structures to increase its subscriber base in emerging countries where the market conditions are different. “We think about revenue as a guiding principle for us. We do these different tests and try to figure out what is the right set of plans that have the right benefits, the right features that are delivered at the right price for the subscribers in any given market” Peters was quoted as saying.
Netflix Look To Attract New Users With Competitive Pricing
Founded in 1997 in California, Netflix entered the Indian market in January 2016. It is the largest video streaming platform, however, its impact on the Indian subscribers has been very limited due to its pricing structure.
While Netflix’s bundle plans are yet to be launched in India, its competitors namely Disney-owned Hotstar, ZEE5, Amazon Prime Video, and Reliance-backed ALT Balaji are already offering annual plans to their customers.
Moreover, these competitors are offering their services at much aggressive pricing as compared to Netflix. For instance, Hostar and Amazon Prime are offering their video streaming services at INR 999 for a year.
On the other hand, Netflix, even for its cheapest video streaming service charges INR 199 per month, roughly translating to INR 2400 per year. However, if Netflix provides a 50% discount on this plan, if bought on an annual basis, it’ll charge around INR 1200 to its users, which might help it to add more users to its subscriber base in the country.
According to a report by Boston Consulting Group, the over the top OTT video streaming market is expected to reach a market size of $5 Bn (INR 35,730 Cr) by 2023. And now Netflix, with the launch of cheaper annual plans, might become the leader of this market.