Netflix India looks for growth in mobile-only subscriptions

Netflix has announced it will launch a mobile-only version of its service in an effort to gain traction in one of the worlds’ fastest growing digital economies.

With the international markets looking like the most promising growth opportunities for Netflix in the future, the team will have to adapt the service to context. India is a market which has promised a lot over the last couple of decades, but it is only in recent years the hype could be realised.

For INR 199 per month (roughly $2.80) subscribers will be able to sign-up to mobile-only access to the entire Netflix content library. There might be a few conditions which will frustrate some demanding consumers, but this is a very intelligent move which could prove to be a new means of engagement around the world.

“Our members in India watch more on their mobiles than members anywhere else in the world and they love to download our shows and films,” said Ajay Arora, Director of Product Innovation at Netflix. “We believe this new plan will make Netflix even more accessible and better suit people who like to watch on their smartphones and tablets – both on the go and at home.”

Looking at context, India is a country which is going through a delayed digital revolution. It might have been hyped as the holy grail for digital companies in the past, but it is only since the introduction of Reliance Jio two years ago that the digital revolution gained traction. Jio severely undercut rivals on price, democratising the consumption of data for the masses. Adoption of digital has been rapid and is sustaining the gains.

According to the Ericsson Mobility Report released last month, Indians consume more data than any other nation. Data usage per smartphone at an average of 9.8 GB per month, which is expected to almost double to 18 GB by 2024. The introduction of Jio and its disruptive data tariffs are pinned down as the catalyst, with the telco forcing rivals to drastically alter their offerings to consumers.

From an entertainment perspective, Netflix has pointed to a FICCI-EY 2019 report which suggest Indian consumers spend 30% of their phone time, and 70% of data allocations on entertainment. This is a trend worth paying attention to and it might come as a surprise few have capitalised on it to date, aside from Jio of course.

There are a few conditions to be aware of however. For INR 199, resolution will be limited to SD 480 pixels, only 100 titles will be downloadable to start with and Netflix will prevent any casting to TVs. This will frustrate a few consumers, but the price is a reasonable trade-off for such limitations.

In terms of the potential, this is a very good strategy from Netflix, which has had to explore new initiatives to gain traction outside of its domestic market. The international markets represent the greatest opportunity for growth in the future, the US currently accounts for roughly 48% of current revenues, though it will have to appreciate a cookie cutter approach to expansion will not sustain the growth investors are seeking. These investors are already a bit irked with recent figures, share price has declined 15% since the financial results last week, though this should provide fuel for optimism.

The Netflix team has suggested it has no plans to introduce such an offer to other markets just yet, though success might change this. Although we see Netflix subscriptions as on the cheap side in the developed markets, the same perception will not exist everywhere. This could certainly be an option to double-down on growth in developing markets around the world.