Netflix (NASDAQ:NFLX) has been generating a lot of buzz in India of late for quite a few reasons. The video streaming specialist has made headlines after one of its India-specific originals -- Indian Matchmaking -- ruffled a few feathers for its portrayal of how affluent families in the country fix up marriages for their sons and daughters.
While the show has the internet divided, some believe that it can catalyze Netflix's subscriber growth in the Indian market thanks to the touchy topic it covers. That won't be surprising as the company is reportedly making a couple of solid moves to capitalize on this buzz and corner a bigger share of India's booming over-the-top (OTT) video streaming space.
Netflix is stepping up its content game
Netflix had set aside $420 million last year to develop India-specific content. Not surprisingly, the company recently announced a roster of 17 new original productions for the Indian market. These include 12 new movies and five television shows.
Some of these movies include A-list stars working in Bollywood (India's Mumbai-based movie industry). This could help Netflix land more subscribers considering theaters in the country remain closed due to COVID-19, giving online video streaming services a shot in the arm thanks to their affordability.
Going to the movies is a more expensive affair as compared to streaming them on smartphones or televisions; the average movie ticket costs 200 Indian rupees (roughly $2.70), according to Ernst and Young.
For comparison, Netflix's cheapest, mobile-only plan in India costs 199 rupees a month. The premium plan that's worth 799 rupees a month (around $10.70) is equal to purchasing four movie tickets, but it gives users access to an extensive content library. Additionally, the premium plan allows users to stream to four devices at a time, and that could help bring down subscription costs if multiple users decide to contribute.
The good news for Netflix is that filmmakers in India are willing to release their new productions on video streaming platforms, giving theatrical releases a miss. And as Netflix has lined up a good number of movie premieres, it is on track to take advantage of this transition as consumers now have a stronger reason to get a subscription.
A new plan could be in the cards
AndroidPure reports Netflix is testing a new budget plan in India priced at 349 rupees a month. This plan would allow users to stream high-definition content on any one device at a time. That device could be a smartphone, tablet, or a computer, but not a television.
For comparison, the company's entry-level plan priced at 199 rupees allows users to stream to only phones and tablets -- not computers or televisions -- and in standard definition. This effectively means that Netflix is trying to upsell the new plan to existing customers who are currently on the base plan.
And now is a good time to do that given the company's content pipeline, uncertainty around the reopening of theaters in light of an increasing novel coronavirus infection count, and Netflix's impressive pricing power in the Indian market. The company is enjoying favorable trends in India as people are spending more hours watching Netflix and its subscriber base in the country is going up at a nice pace, according to third-party reports, setting the stage for it to make more money from the country's video streaming market.