Netflix is introducing a cheaper, mobile-only subscription plan in India as it looks to tailor its offering in Asia, a key growth region for the service.
The SVoD confirmed on Wednesday (17 July) it will roll out the new plan in the third quarter of this year. It will restrict customers to mobile-only streaming, and will be priced lower than the company’s existing subscriptions, which in India are currently between 500 rupees and 800 rupees.
In a letter to investors, Netflix said the mobile-only plan “will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where Pay TV ARPU (average revenue per user) is low (below $5).”
The streaming giant began testing a 250 rupee (US$3.63) mobile-only subscription in India earlier in the year.
The announcement came as part of its quarterly results, in which it reported lower-than-expected subscriber additions. The company lost more than 100,000 subscribers in the US — even though it was expected to gain over 300,000 — and outside the US it added 2.83 million subscribers, well below the forecasted 4.81 million.
As domestic growth stagnates, Asia is forming an increasingly critical growth engine for the business. But it is trying to figure out how to tailor its offering in Asia without completely changing its business model.
While advertising-supported models are popular in Asia, where consumers are less willing to pay for pricey monthly subscriptions, Netflix confirmed once again this week that it will not be introducing advertising.
“We, like HBO, are advertising free,” the company said in its letter to investors. “That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”
The reduced price subscription in India will bring it closer to its key competitors in the market. Disney’s Hotstar charges 299 rupees per month, while Amazon bundles its video and music streaming services with its 129 rupees per month Prime membership.