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Update: Netflix rolls out mobile-only plan in India costing Rs 199 per month

Update on July 24th: In a first, Netflix will today rollout a mobile-only subscription plan in India priced at Rs 199 per month. A Rs 250 per month plan was being tested since March, to which the company got an “overwhelming” response. The new plan will allow standard definition streaming on one device at a time (mobile and tablet), doesn’t allowing casting, and allows downloads. Netflix said half of its Indian consumers have downloaded a film or episode in the last month. The mobile-only plan is being tested and may come to other markets as well.

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Earlier on July 18th:

Netflix will roll-out a mobile only streaming plan in India, which will be priced lower than its existing subscription plans. The plans will rollout by Q3 and is aimed at capturing more subscribers. In its Q2 letter to investors, Netflix said this “will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where Pay TV ARPU (average revenue per user) is low (below $5).” According to chief product officer Gregory Peters, having a lower price plan is important not just because other services are cheaper, but because of the need for a plan that complements the existing tiering structure. Netflix also said that its going to work on partnerships – like bundling – to improve accessibility. “We think that there’s an opportunity then to be able to broaden the access to the service and so more people can enjoy that increasingly relevant content offering.”

Netflix had said during the last quarters earnings call, that a lower price tier will be important to adding members in India, although its not positive that a mobile-only lower price tier model is the right one for India. It had already begun testing a mobile-only subscription plan for India at Rs 250 per month in March.

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Netflix’s chief content officer Theodore Sarandos said five new originals – including the Baahubali TV series – are coming to India, and there’s “nice steady engagement” with Indian viewers. “Growth in that country is a marathon. So we’re in it for the long haul and we’re seeing nice steady progress.” Netflix missed subscription forecasts and lost subscribers – 130,000 subscribers – in the US for the first time since 2011. Net subscriptions grew by 2.7 million globally, as opposed to the forecast of a 5 million increase.

130,000 subscribers lost in the US

Netflix said the missed forecast was across all regions, but was slightly more in regions with price increases. “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region). Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated.”

Download: Letter to Shareholders | Investor call transcript

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Updated with launch of new mobile-only plan, headline changed accordingly.

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