Netflix (NFLX) entered India’s video streaming market in 2016 as part of its global expansion drive. As a result, the service reached more than 190 countries. Netflix has struggled for a big break in India. At the end of last year, only 1.2 million subscribers had signed up in India. In comparison, Hotstar and Amazon Prime Video had 3.0 million and 2.5 million subscribers, respectively, at that time. Hotstar is a Walt Disney (DIS) property. Disney bought Hotstar parent Star India as part of its $71.3 billion Fox deal that closed in March this year.
Netflix stock compared to Amazon and Disney
Netflix has tried several strategies to boost the uptake of its service in India. The company’s strategies in India range from offering local original content to price adjustments. In July, Netflix cut prices in India with the introduction of a cheap plan that costs less than $3 per month. Previously, Netflix’s cheapest Indian plan cost more than $7 per month.
Netflix stock has fallen 6.1% since the company introduced the $3 per month plan in India on July 24. Amazon (AMZN) stock fell 12%, while Disney stock rose 4.6% during the same period.
Subscriber growth and India
Netflix added about 6.3 million international subscribers in the third quarter, which beat its target of 6.2 million. The addition marked a big improvement from the second quarter when Netflix added 2.8 million international subscribers compared to its target of 4.7 million.
In the second and third quarter, Netflix’s results showed that its growth weakened in its domestic market. As growth becomes more difficult at home, Netflix counts on international markets, like India, to fuel its future growth.
India’s huge population of 1.3 billion people and fast-growing Internet users make it a coveted market for big tech companies. Google (GOOGL), Amazon, Alibaba (BABA), and Microsoft (MSFT) are pursuing cloud computing businesses in India. PayPal (PYPL) launched local operations in India. Facebook (FB) is about to launch its WhatsApp payment service in India.
Netflix’s new pricing model in India
After cutting prices in July, Netflix is in a fresh bid to boost uptake in India. The company is testing a new pricing model in India. The test involves allowing people in India to purchase Netflix subscriptions for several months, up 12 months, at once.