“We are just getting started in India. We will experiment with other pricing models and see how that does in terms of being able to accelerate our growth and get more access. But even on the existing model, we feel like we have a long runway ahead of us in India” Netflix chief product officer Greg Peters said in a post-earnings interview on Wednesday.
Netflix is currently the most expensive video streaming service in India, with monthly subscription plans starting at Rs 500, more than double of its rivals in India.
A lower pricing tier will likely help Netflix go beyond the premium subscriber market to gain more market share in India’s nascent video streaming market, currently dominated by Star India’s Hotstar and Amazon Prime Video.
According to audit and consultancy firm PwC, India’s video streaming market is growing at a compound annual growth rate (CAGR) of 22.6% and is expected to move into top ten video streaming markets by 2022 with revenues of Rs 5,595 crore.
“There’s over 300 million mobile phone subscriptions or households and there’s almost twice that in mobile phone subscriptions in India. We will take one million at a time and figure out how to expand the market as we grow” said Netflix co-founder & CEO Reed Hastings in the interview.
“We’re super encouraged with India and the growth that we’ve got early on, but we know it’s going to be somewhat of a tough market. It’s not going to be overnight where we’re going to get to higher numbers” added chief financial officer David Wells.
In an earlier interview with ET, Netflix co-founder Reed Hastings had said that India is a key part of the company’s international subscription growth and will likely account for a huge chunk of its International subscriber base in the future.
While Netflix doesn’t provide a country specific breakdown of its subscriber base, the company disclosed in a letter to its shareholders that it has added 5.1 million paid International subscribers during the quarter ended September 30, taking its paid International base to 73.5 million subscribers. The company’s overall paid userbase stands at 130.4 million subscribers at present.
India has also turned out to be a lucrative content hub for Netflix which plans to spend more than $8 billion on original programming this year.
The company has released two India original series, Sacred Games and Ghoul, and has commissioned around nine more original series, making it the largest investment it has made to date in local original programming.
Netflix chief content officer Ted Sarandos said in the earnings interview that Sacred Games and Ghoul along with the original movie Love Per Square Foot, has helped grow the awareness of the service that made its India debut in January 2016.
“What it really was able to do was take this product that maybe was less known in India, when we launched and make it feel more local, more relevant. What we saw was all of that was following a nice steady increase in viewer engagement prior to us launching those big original shows” Sarandos said.
Hasting said they also plan to expand Netflix’s original programming to other Indian languages and also explore more bundling partnerships in India. However, he didn’t disclose any specific details on these initiatives.
(This story has been sourced from a syndicated feed and was originally published on ET Tech.)