PRICING NETFLIX

EXPAND INTO TIER 2 AND TIER 3 CITIES

PM SCHOOL WEEKEND CHALLENGE 51

Lakshay Tutlani and Amandeep Gupta
 FUTURE OF GROWTH IN OTT INDUSTRY LIES IN TIER 2 AND TIER 3 CITIES

• India is World’s fastest growing OTT market ; 40+ OTT players currently in India, Poised to reach 5 Bn USD by 2023

• Increasing Internet and Smartphone penetration in Tier 2 and Tier 3, cheap data rates -> OTT uptake in Tier 2 and
Tier 3 cities
• Internet penetration to increase from 48% now to 60% by 2022 ; Addition of ~200 Mn new internet users in 2
OTT Industry in years
India • Growth to come largely from Tier 2 and Tier 3 cities
• 65% OTT consumption during the lockdown was recorded in rural India*

Key Competitors to Netflix in Tier 2 and Tier 3 Cities • Local Vernacular Content
• Lower Price Points
• Relatable, Aspirational content
• Strong Brand Equity

Winning Strategy for Tier 2

and Tier 3 Market

*Broadband India Forum

 CONSUMER PAIN POINTS IN TIER 2 AND TIER 3 CITIES WITH RESPECT TO NETFLIX

1 Too Expensive 2 Lack of Relatable Content

I have heard about I can not relate to the

Netflix, I like some shows content at Netflix. I need
on Netflix, but it is too some localized shows
expensive for me and movies on Netflix

3 Less Vernacular Content 4 Not comfortable with Subscription based

OTT Model
I do not understand English. I
would appreciate if there are I am not comfortable with the
more Hindi shows and old subscription-based Internet
Bollywood movies Streaming. I can only pay for
my Cable operator

*Broadband India Forum

THE SOLUTION – HYBRID MODEL ( AVOD + SVOD)

Introducing an AVOD (Advertising-based video on demand) based Basic MOBILE plan with LIMITED content

KEY FEATURES

No cost/price to be paid by Choice to select 2 languages for Small Town narrative based Selected & Limited Content - Trending
user for AVOD based plan specific content content and recommendations Regional languages TV shows, cult
Bollywood/Regional movies

THE ADVANTAGES

• AVOD based plan will accelerate Market penetration in Tier 2 and Tier 3 cities as done by

• Tier 2 and Tier 3 cities users will be able to relate with Netflix, which currently has majority of the user base in Metro Cities

• Movement from AVOD to SVOD overtime, Increase in STARTERS, WATCHERS & COMPLETERS percentage
THE PRICING PLAN
Features Starter Mobile Basic Standard Premium
Monthly cost * (Indian Rupee) ₹0 ₹199 INR ₹499 INR ₹649 INR ₹799 INR
Number of screens you can watch on at the same time 1 1 1 2 4
Number of phones or tablets you can download on 1 1 1 2 4
Unlimited movies and TV shows Limited ✓ ✓ ✓ ✓
Watch on your mobile phone and tablet ✓ ✓ ✓ ✓ ✓

Watch on your laptop and TV - - ✓ ✓ ✓

HD available - - - ✓ ✓
Ultra HD available - - - - ✓

THE UPDATED FLOW

Post 30 day free plan, user will If “Starter” selected, user need Limited content based on
be given an option to select a to select 2 favourable user’s usage will be served
specific plan languages
LAUNCH PLAN

• Regional big brand ambassadors with high mass following in tier 2 and tier 3 cities
• Influencer Marketing - Partnering with Tier 2 and Tier 3 Influencers on digital platforms (MX Takatak/Tiktok)
• Affiliate marketing collaborations with Regional actresses and movie stars
• Print Media advertisements
Promotions • Digital Marketing on Niche Social Media Platforms (Sharechat, Moj, Likee)

• Collaborating with regional TV channels such as Mahua, PTC Punjabi for marketing, and content
partnership
Partnerships • Partnering with production houses for Vernacular Movies and Shows Content

• Introducing Netflix Ambassador Program

• Refer 10 people to sign up for the new offering, and Get 2 Months 199 Rs Mobile Plan FREE
Referrals
METRICS TO MEASURE
AARRR Framework: Acquisition, Activation, Retention, Referral, Revenue

• New users onboarded across tier 2 and tier 3 cities

ACQUISITION • Measure DAU, WAU and MAU
• User acquisition % across channels

• Increase in Engagement Time

ACTIVATION • % Conversion from Starters to Watchers and Watchers to Completers
• % Completion rate of the content such as videos etc

• Overall uninstallation rate

RETENTION • Performance across Retention Cohorts: Tier1, Tier 2 and Tier 3 (Demographic etc.)
• Drop-offs and sentiment across user base – NPAs, User Interviews to capture

• % of Referrals across different cohorts

REFERRRAL
• Response to “Netflix Ambassador ” program - # of Referrals per Netflix Ambassador

• Conversions from AVOD to SVOD

REVENUE
• Overall increase in the revenue compared with expenditure/spend