Netflix raised prices and lost customers. Can a mobile-only plan win them back?

Face it: streaming video is getting more expensive. Not only does the impending arrival of brand-specific streaming platforms like Disney+ and HBO Max mean that, if you want to watch everything, you’re going to have to pay for multiple services, but Netflix recently raised its prices, driving away existing subscribers and sending its stock price plummeting.

What’s a streaming service to do? Netflix might have already found the answer. Alongside its declining subscription figures, Netflix also announced plans to launch to a mobile-only subscription plan in India. For less than a regular Netflix subscription, customers will be able to watch all of Netflix’s content on their phones — and only on their phones — at a resolution that’s expected to top out at a mobile-friendly 480p.

Right now, India is the only place where Netflix will offer the mobile-only service, and the company said that the new subscription tier is targeted at markets where the average monthly revenue per customer is $5 or less. Still, Netflix didn’t rule out a larger roll-out for the plan in the future, saying only that it would “continue to learn more after launch of this plan.”

Netflix previously tested its mobile-only option in “various countries,” including India, where it costs about $4 a month. That’s significantly less than a basic Netflix subscription in India, which runs $7 a month, or in the United States, where it costs $9.

In the second quarter of 2019, Netflix lost 126,000 subscribers in the United States and missed its international targets by about two million customers. According to Netflix, regions that had price hikes during that time period were most affected. A cheap, mobile-only plan might be the optimal way to get those people back. 

Half of Netflix’s customers watch video on their mobile devices already, although television screens are still the preferred way to catch programs like Stranger Things and the Emmy-nominated Ozark. If mobile streaming is cheaper than regular TV, however, it’s not hard to imagine budget-strapped entertainment fans going all-mobile, all the time. On small phone screens, picture quality doesn’t matter as much either, meaning customers will need to use less data (and pay less to mobile companies) to watch their favorite shows.

Putting advertisements on Netflix is another option that could boost revenue, although the company needs to be careful. Studies have shown that subscribers would cancel their Netflix memberships if the streaming giant started broadcasting ads without a significant price decrease.

A mobile-only plan, on the other hand, doesn’t hurt anyone. If you don’t mind watching TV on your phone, you can save a few bucks. Meanwhile, if the TV experience is important to you, it’s still there. Just be prepared to pay for it.

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