Netflix (NASDAQ:NFLX) has been steadily making progress in India -- it's attracting more subscribers through targeted content and new subscription plans to make its offerings more viable in the face of stiff competition.
Its streaming service was all the rage among Indian consumers during a countrywide lockdown that led to a spike in consumption of over-the-top (OTT) video content. According to content aggregation service JustWatch, Netflix saw a 204% spike in user interest in India during the first month of the country's strict lockdown, which began on March 24. That interest seems to have translated into strong market share numbers for the company as well.
Netflix makes a dent in a competitive market
According to JustWatch, Netflix held a 20% share of the Indian OTT video market from March to June 2020, on par with Amazon's Prime Video service and ahead of Disney+ Hotstar's 17% share. Now, the market share numbers should be taken with a grain of salt as the data is limited to JustWatch's user base, but with 215 million user profiles around the globe, JustWatch can still offer investors solid estimates for the industry.
And according to another third-party estimate, Netflix reportedly controlled just 5% of the market a year ago, so it appears the company is making progress in India.
Netflix is a premium service in the country with its cheapest, mobile-only plan priced at 199 Indian rupees (roughly $2.70) per month, which allows a user to stream content on only one screen and in standard definition (480p resolution). Users need to shell out 649 rupees ($8.78) monthly to watch HD (high-definition) content on their laptops or televisions. The highest-priced plan of 799 rupees (roughly $10.80) gives users access to 4K content and the ability to stream across four screens.
On the other hand, an Amazon Prime subscription can be had for 129 rupees ($1.75) a month or 999 rupees ($13.52) a year. The subscription offers users many benefits, including Prime Video, Prime Music, faster delivery times without any fee, and early access to deals, among others. What's more, users can enjoy full HD and ultra HD content without having to pay any additional fees.
Similarly, a Disney+ Hotstar annual subscription also works out to be cheaper than Netflix's bare-bones basic plan. The fact that Netflix and Prime Video share the No. 1 spot in India's OTT video market indicates the former has strong pricing power.
A few years ago, Netflix co-CEO Reed Hastings said that the company's next 100 million subscribers could come from India. The company is a long way off from that target as third-party estimates put its subscriber base in the country at two million at the end of 2019.
But Netflix continues to tweak its platform in the country to boost its subscriber base. For instance, the company has started offering a Hindi language interface to make it easier for users to navigate the platform. This is an important step to expanding the service's appeal as English-speaking viewers reportedly account for just 10% of Netflix's market in India.
The company is also offering free access to three movies and the first episodes of select shows in a bid to widen its subscriber base in the country. All of these initiatives should prove fruitful for Netflix in the region long-term and help it maintain a leadership position in the fast-growing video streaming market.