“We think that giving everyone in a country access to Netflix for free for a weekend could be a great way to expose a bunch of new people to the amazing stories that we have, the service, how the service works and hopefully get a bunch of those folks to sign up,” said Netflix chief operating officer and chief product officer Greg Peters said in a post-earnings interview on Wednesday. He, however, didn’t disclose any further details.
Netflix has been conducting various pricing experiments in India and several parts of the world over the past year or so, in a bid to broaden its user base while retaining its premium offering. It stopped offering a free 30-day trial in India earlier this year and recently extended it to all markets.
The video streaming major had
debuted a low-cost mobile-only plan for the Indian market at Rs 199 per month in July last year, which has since been rolled out into other Asian markets like Malaysia and the Philippines.
It has also piloted a
cheaper entry-level plan,
discounted long-term subscription plans as well as
free content access to non-members in the country for a limited time. In August, it made select shows and movies available for free to all users across the world.
Growth in Asia-Pacific region
The development, however, comes in the backdrop of the Los Gatos, California-based company increasingly relying on international markets for future growth.
In a letter to shareholders, Netflix said that Asia Pacific region was the largest contributor to its paid membership growth in the quarter ended September, accounting for 46% of the global paid additions during the quarter. The firm reported 23.5 paid subscribers in the region in Q3 while the global paid subscriber base stands at 195.2 million.
Revenues from the region also increased by 66% to $635 million for the quarter, from $382 million in the corresponding period last year.
“While this is encouraging, we still have much work to do and we’re working hard to replicate this success in India and other countries,” the company said in the letter.
India has emerged as an important market for the firm, apart from being a key content hub. However, it faces intense competition from rivals like Disney+ Hotstar, Amazon Prime Video, Essel Group’s ZEE5, and Times Internet*-owned MX Player, all of which offer more economical pricing packages to users in the country.
“We have been working really hard to try and make our offering in India more competitive, more attractive to members and members-to-be, and there’s a bunch of different product features we’ve been doing, partnerships and payments integrations,” Peters
had told analysts in April this year.
In December, the service had announced
plans to spend Rs 3,000 crore on content programming in India in 2019 and 2020. The video streaming platform has commissioned about 50-60 productions in the country, making its largest investment in original programming outside the United States. On the product front, it added support for the Hindi language user interface in August this year.
Netflix also recently partnered with Reliance Jio, as part of which the service has been integrated with two of Jio’s set-top boxes. “We’ve also partnered with financial institutions in India to make payment processing easier and more seamless for our members, which we expect will have retention benefits,” the company said in the letter.
Global user growth slows down
After a blistering subscriber surge in the first half of 2020, aided by the lockdown restrictions due to the virus outbreak, the growth slowed down significantly in the September quarter. Netflix added only 2.2 million subscribers during the quarter as compared to 6.8 million subscribers in the same period last year.
The company said the slower growth was expected due to record performance in the first two quarters of 2020 and noted that it has added 28.1 million subscribers in the first nine months of 2020, which surpasses the company’s total member additions in all of 2019 that stands at 27.8 million.
“As the world hopefully recovers in 2021, we would expect that our growth will revert back to levels similar to pre-Covid. In turn, we expect paid net adds are likely to be down year over year in the first half of 2021,” the company said in the shareholder letter.