Netflix subscription charges in India to remain unchanged despite price revision in US
Netflix has increased subscription plans in the US by 13% to 18%. But the price revision is unlikely to affect Netflix’s other markets.Updated: Jan 16, 2019 13:36 IST
Netflix is not going to increase its subscription prices in India, according to sources.
The company on Tuesday raised subscription plans in the US by 13% to 18%. The price revision is believed to be part of Netflix’s efforts to ease concerns over its increased spending on original content and imminent competition from new OTT players such as Disney.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,” said a Netflix spokesperson.
Netflix reportedly spent at least $8 billion on new content in 2018 alone, reported CNN. The company last year also announced new and original content for emerging markets such as India and Asia Pacific. The rapid expansion, however, raised concerns over the company’s cash flow. In October last year, Netflix announced taking $2 billion in new debt.
Netflix’s price revision in the US has received mostly positive response from the industry experts.
“We are very optimistic on successful implementation, with this being the fourth increase for US customers in Netflix’s history with the last being the remarkably successful 2018 price increase,” Buckingham Research’s Matthew Harrigan is quoted as saying.
Harrigan added that inreasing prices “improves free cash flow and allays concerns over higher original programming spending to offset the loss of Disney and Fox at year-end.”
Netflix’s decision to keep prices in India unchanged may have been driven by the growing popularity of its application and also a price war with rival Amazon and Hotstar. Netflix is hoping to add another 100 million subscribers from India alone. The app has over 50 million users in the US and roughly 137 million subscribers globally.
“If you think about the opportunity, there’s about 450 million internet users in India and about half of them are watching video on YouTube and services like that, which makes for a very interesting, addressable market,” said Netflix’s chief content officer Ted Sarandos in November last year.
Netflix is also said to be working on newer pricing models for its new markets. Recently, it started testing cheaper mobile-only subscription plan in Malaysia. The mobile-only plan is priced about half of the original base price of the plans.
Netflix plans in India start at Rs 500 and go up to Rs 800. Amazon’s Prime Video is available for Rs 129 per month and Rs 999 for one year. Indian OTT player Hotstar’s premium membership is available for Rs 199 per month. All these players have tied up with local telecom operators such as Airtel and Vodafone to offer free trials.