Is JioCinema’s new subscription plan sustainable?
Reliance-backed streaming platform JioCinema has slashed prices for its premium content, with subscription plans now starting at a mere Rs 29 a month. This move has sparked industry speculation that JioCinema’s rates may put pressure on other OTT platforms to compete. While some experts believe that it will disrupt the Indian OTT landscape, some representatives of OTT platforms questioned the sustainability of JioCinema’s plan.
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Starting at just Rs 29 per month, this new plan promises an ad-free experience delivered in up to 4K quality, along with offline viewing options. The introduction of such affordable pricing marks a significant departure from the prevailing subscription rates in the market. Earlier, JioCinema was offering the premium subscription plan at Rs 999 per annum.
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Speaking to exchange4media, a reliable source from one of the broadcaster-based OTT platforms lauded JioCinema’s move but said there is no intention to adopt a similar strategy. “It is very interesting. Good luck to them. We still remain a subscribed platform and we are hybrid- SVOD and AVOD. Honestly, we don’t see much of an impact of other OTT platforms going free because the quality of content that we put up is very high and compelling. We want to stay in SVOD and AVOD. “We didn't make any change in our strategy and we have no intention of making any change,” the source said. Another industry insider, on the condition of anonymity, said this move could attract subscribers initially but in the long run it “might not be sustainable and they may have to raise the prices eventually.” According to a report by Elara Capital, the average pricing for broadcaster-based OTT platforms in India stands at Rs 103 per month, while global giants like Netflix and Amazon Prime charge an average of Rs 358 per month for premium plans. “This places JioCinema’s premium plan at an astonishing 86% discount compared to its peers. However, despite its competitive pricing, JioCinema still faces the challenge of building a robust library of originals and global content to match its global counterparts,” said Karan Taurani, Senior VP, Elara Capital. He, however, added that other OTT platforms may not be able to raise pricing, due to JioCinema Premium’s disruptive pricing, which will limit SVOD revenue growth prospects. “Broadcaster based platforms have a freemium offering to their advantage (ad and subscription revenue), however global OTT giants may need to add an ad tier pricing or explore innovative means (curb password sharing etc) to drive SVOD revenue, as pure ARPU-led hike may be a challenge. “Broadcaster based OTT platforms may also report lower revenue growth, as subscription revenue is approximately 40%-50% of their OTT revenue. They may not see a sharp jump in ARPUs,” he said. The new subscription offering, ‘JioCinema Premium’, offers an ad-free experience. Members can access exclusive series, movies, Hollywood content, kids’ shows, and TV entertainment on any device, including Connected TVs. The platform also has a ‘family plan’ at Rs 89 a month, with an additional benefit of four simultaneous screen access. Existing JioCinema premium members can avail additional benefits of the “family plan” at no extra cost. Sports content, including the ongoing Indian Premier League (IPL) and thousands of hours of entertainment content, will continue to be available for free as part of the platform's ad-supported offering.