Netflix Hasn’t Increased Prices In India Probably Because It Can’t Afford To

On Jan. 15, video streaming service, Netflix, made headlines as it increased its subscription cost by 13-18% across the US and Latin America. This is the biggest increase by the company since its inception 12 years ago and will impact 58 million American subscribers, who will now have to shell out at least $13 for a month of streaming.

“2018 has been a critical year in the evolution of OTT players in India that benefitted on the back of rampant uptake of 4G services, better integration of payment gateways across multiple services and overall reducing smartphone prices. It was also a year that saw increased investments and launch of new services thereof.

With home-grown names (Star India’s Hotstar, Viacom18’s Voot, Zee’s dittoTV, Balaji Telefilms’ ALT Balaji and Sony’s SonyLiv) and independent platforms like Spuul and TVF Play giving tough competition to both Netflix and Amazon Prime Videos, Netflix cannot afford to take prices any further north to where they are currently.

If it must, it must get creative to mirroring in-app purchase model like the one offered by Apple via its AppStore. Key for a market like India is to offer ‘sachet prices’ and modular packages that allows customers the freedom to choose the content they prefer at a nominal cost.

Bottom line is, not all customers are watching all sorts of content and charging a standard fee for full content access isn’t what the quintessential price conscious, argumentative Indian wants. Where Netflix is getting it wrong is where they are focusing on number of screens as a strategy which has worked for them in markets like US and UK – the reason this works there is because the number of screens per home is multiple times that of an Indian household,” said Sanchit Vir Gogia, CEO and chief analyst at Greyhound Research.

[Quartz]


Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.

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