Netflix has been testing its cheaper plan intended for mobile-only use for a while now, and has now officially announced the same in a letter to its shareholders. The new plan, which will be more affordable than its existing tariffs. will rollout in India during the third quarter of 2019. Notably, the new plan can only be activated for mobile usage, unlike the existing plan that lets you stream on a laptop and TV as well.
According to the company, the customer growth has not been in line with its expectations. In fact, the company mentioned that the net subscribers on the platform declined in US during the quarter. Netflix is attributing this to the higher prices of its existing plans, which is what has prompted the company to come up with a more affordable option for all. In a letter to the investors, the company mentioned, “The new plan 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).”
Netflix has not yet revealed whether the plan will be made available in any other market outside of India. Instead, the company maintained that it will “continue to learn more after launch of this plan.” Basically, the new plan will be a trial and error run for the company in India, and in case it’s met with a positive response, will be expanded to other markets. We can expect the mobile-only plan to have the same restrictions as the existing basic plan, which means the video streaming quality will be restricted to 480p.
As of now, it’s not clear whether the mobile-only plan will also include tablets and iPads. We will know more when the plan goes official later this year.