Why Did Netflix Suddenly Drop Subscription Prices In India?

The streaming wars continue to heat up in India, and that may be what’s led to a cool down in Netflix pricing.

The media giant announced earlier this week in a blog post that it has cut prices for service in India, where it has faced pressure from streaming offerings from Amazon Prime Video and Disney+ Hotstar, which both have lower price points.

Netflix India Vice President of Content Monika Shergill noted in the post, “starting today, everyone in India can get all of Netflix — uninterrupted and without ads — at new, lower prices.” The post then listed the new prices, whose bottom level includes a plan for just $1.95 (₹149) per month for mobile-only viewing (India has more than 500 million smartphone users).

The basic plan will cost just $2.61 (₹199) per month, a sharp decrease of 60% compared to previous pricing. The most expensive plan in the tier, premium, will cost $8.51 (₹649) per month.

Shergill didn’t offer any reason for the change in the blog post, which has led to speculation over what’s behind the move. The most obvious reason seems to be undercutting the competition, which has long been less expensive than Netflix.

Even with the price drop, the latter’s cheapest service remains 78 cents more than Amazon Prime’s lowest level. And Disney+ Hotstar has a service that costs a mere 55 cents per month. That has led to great disparities in subscriptions in the country, where companies are eager to establish a foothold. They see India as an untapped market and place where subscriptions could explode, given the right incentives.

Netflix has between 4.4 million and 5 million subscribers in the country, depending which consulting firm’s numbers you believe. That compares to 19 million for Amazon and more than 45 million for Disney + Hotstar.

And that’s a disappointment given Netflix’s aspirations. The company launched in India five years ago, and as recently as 2018, Chief Executive Officer Reed Hastings said he thought his company could reach 100 million subscribers there.

To attract new subscribers, Netflix has focused on content, which has been a successful strategy in other markets. At a media conference in India last month, Shergill said the behemoth is creating localized content for Indian audiences, including Hindi-language films, series, documentaries and more. South Indian languages including Tamil, Telugu and Malayalam are also represented in new content.

But Amazon and Disney+ Hotstar content continues to lead the streaming charts in the country. And Disney+ Hotstar has taken advantage of the appeal of sports, with rights to streaming of Indian Premier League cricket league matches and English Premier League soccer games.