- Cheaper streaming offer to launch in Q3
- India is a key target market for Netflix
- Increasing competition as Matrubharti launches OTT platform
Netflix has unveiled plans to launch a mobile-only streaming plan in India following a test-run earlier this year.
The plan, which will be made available in India during Q3, will offer a cheaper alternative to existing Netflix subscriptions which include the ability to stream through a TV or laptop.
The aim of the plan is to tackle one of the bigger challenges that Netflix faces in India – the availability of cheaper rivals in a market where Pay TV ARPU is traditionally low.
Rivals such as Amazon Prime Video and Hotstar are currently priced lower than Netflix in the country, with more India-exclusive services also coming to market.
According to The Verge, Netflix told investors in a letter that 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).”
Questions remain around the scope of the “mobile plan” and what this will include in terms of device. It priced the test plan at $3.63 per month – half of the cost of its basic Indian streaming plan.
India’s VOD market is set to boom, with Boston Consulting Group estimating that it could reach $5 billion by 2023 – up from $500 million last year. Paying subscribers will probably rise to as many as 50 million, while users of advertising-supported video-on-demand will reach 600 million, according to the analysts.
It has been identified as a key growth market for Netflix, which is set to almost triple subscribers there to 4.1 million according to HIS Markit. CEO Reed Hastings has previously set a target of 100 million subscribers in the world’s second biggest TV market (after China).
During its most recent financial results, which saw a dip in US subscribers for the first time, chief content officer Ted Sarandos said they company had seen a “nice steady increase” in engagement but admitted that “growth in that country is a marathon. We’re in it for the long haul.”
Competition within the Indian market is increasing, however. Matrubharti, an Indian content start up, recently announced a new video streaming service which will offer regional theatre, short films, live poetry, stand-up comedy and other content in Hindi, Gujarati, Marathi and English.
The service, called Matrubharti Vishesh, will include user generated content, as well as content generated from partnerships with authors, poets, and theatre groups.
Matrubharti launched in 2015 offering a curated platform for ebooks and social media in local Indian languages. It has over 750,000 followers based on a “freemium” model.
Explaining his rationale behind Matrubharti’s entry into the video streaming space, Mahendra Sharma, co-Founder & CEO of Matrubharti, said, “Videos are the most popular format of creative expression and OTT apps are riding this wave. We at Matrubharti wanted to target and engage more of India’s youth so that they can showcase their creativity on our platform, and also help them to connect with content in their mother tongue. It was, therefore, the need of the hour for us to plug videos into our platform and earn more screen time from them.”