Netflix launches Rs 199 ($2.8) mobile-only monthly plan in India

Netflix has a new plan to win users in India: make its service incredibly cheap. The streaming giant today introduced a lower-priced mobile tier in the country that costs Rs 199 ($2.8) per month.

The new subscription tier restricts the usage of the service to one mobile device and offers only the standard definition viewing (~480p). Users can also enjoy the plan on their tablets, but several features such as the ability to cast (or mirror) the content to the TV are also restricted.

Netflix started to test a lower-priced subscription plan in India and some other Asian markets late last year.  At a press conference in New Delhi, company officials said today they currently have no plans to expand this offering to other regions. Netflix was also testing a weekly subscription plan — that too is no longer being pursued, officials said.

The announcement comes days after Netflix reported that it added 2.7 million new subscribers in the quarter that ended in June this year, far fewer than the 5.1 million figure it had projected earlier this year. Jessica Lee, VP of Communications at Netflix, said today the company’s recent performance in other markets did not influence its move in India.

Netflix announced last week that it planned to introduce a mobile-only subscription offering in India by Q3 this year. But it will now go live later today, officials said. Previous subscription tiers that start at Rs 499 and go up to Rs 799 will continue to be offered in the country.

Mobile devices are increasingly driving media consumption in India, said Ajay Arora, Director of Product Innovation at Netflix. The streaming service’s users in India are watching more content on mobile devices than users in any other country, he claimed.

India has emerged as an intense battleground for video streaming services in recent years. Netflix today competes with over three-dozen local and international players in the country. Hotstar, owned by Disney, currently leads the market with over 300 million users. The ad-supported service offers about 80% of its catalog at no cost to users. Its yearly plan, which includes titles from HBO and Showtime, is priced at Rs 999 (14.5). Amazon Prime Video is priced similarly.

A cheaper plan could significantly help the streaming service increase its user base in the country, analysts say. “Netflix had a good early start, but growth has been slow in the last six months given the mass Indian consumer market remains value-conscious,” Mihir Shah, Vice President of research firm Media Partners Asia told TechCrunch.

“At 200 rupees, Netflix could address a sizable target market in India. One could draw parallels from the Indian multiplex industry, which caters to 100 million consumers spending an average US$4 per movie,” he added.

Netflix is estimated to have under two million users in India. Despite its relatively smaller user base, it was the top video streaming app in the country by revenue, according to research firm App Annie. Research firm IHS Markit estimated that the service could have more than 4 million subscribers in the country by year-end.

At a conference in New Delhi last year, Netflix CEO Reed Hastings said that India could contribute as many as 100 million users to the platform in the coming years.

Some analysts say Netflix also needs to focus on specific things such as cricket that the vast majority of Indians seem to enjoy. Hotstar has grew its business largely on top of live streaming of high-profile cricket matches. Netflix, which has produced over two-dozen titles in India to date currently has very few titles that focus on sports.

“Netflix will need to strike the right balance of ensuring a steady supply of original local content,” Shah said.