Tricky math tips Indians in favour of annual over monthly OTT subscriptions

Despite American companies such as Netflix billing consumers only monthly and not annually and the model gaining wide acceptance in the West, Indian audio and video streaming platforms continue to believe in the long-term viability of annual subscriptions for value-conscious Indians while offering multiple options to secure customer interest.

Monthly renewals may generate greater revenue, but subsidised annual plans attract loyal, long-term users, minimize churn, foster stronger connections with audiences, micro-target them, and personalize their offerings extensively. They are also more cost-effective for customers in the long term.

“A few OTT platforms offer monthly renewals for reasons such as providing flexibility to the customer, allowing them to subscribe to watch a particular piece of content without being bound for the entire year. Another reason is that a monthly subscription seems cheaper to customers than a yearly subscription. This may benefit the platform, as they may keep receiving monthly renewals, which could be more profitable than a yearly subscription. A disadvantage is that customers might not return after their monthly subscription if they don’t find the content interesting,” said Nitin Gupta, chief content officer of Chaupal, a platform specializing in Punjabi, Haryanvi and Bhojpuri content. Chaupal, as an OTT platform, offers monthly and yearly subscriptions, he added.

Monthly subscriptions seem cheaper
Industry experts like Gupta emphasize that many customers feel that monthly subscriptions are better because the price is lower, making monthly renewals of OTT subscriptions more common than yearly ones. This is due to the presence of DTH, cable, and other platforms, which the Indian population relies on for their daily dose of entertainment. However, once the audience realizes that yearly subscriptions are much cheaper than monthly ones, they are likely to switch to annual plans.

Sourjya Mohanty, chief operating officer—EPIC ON, said platforms like theirs leverage monthly renewals to lower the barrier to entry, attracting cost-conscious users with flexible, manageable payments. However, this can lead to higher churn rates and unpredictable revenue, challenging long-term profitability.

“While monthly plans may feel unfairly costly for steady users, offering a hybrid model with discounted annual bundles or flexible options like quarterly subscriptions can provide a sustainable strategy, balancing short-term growth with long-term financial stability, especially in price-sensitive markets like India,” Mohanty pointed out.

Fairness in payment models comes from offering flexibility and choice. While subscription plans offer convenience to some, they may not suit everyone’s preferences or budgets, Suyog Gothi, head – India and new markets, Pocket FM, an audio series platform, said. Pocket FM takes a balanced approach by combining free access, microtransactions, and other adaptable payment options.

Choice depends on consumer
In a market like India, the choice between monthly and annual renewals for OTT platforms depends mainly on consumer behaviour, which is influenced by factors such as the growing number of content options and changing preferences. Partha Sengupta, managing director of Nielsen India, said the decision to offer only monthly renewals, as Netflix does, reflects a strategy rooted in behavioural economics and consumer psychology.

Monthly subscriptions lower the perceived commitment barrier, especially in price-sensitive markets like India, where financial flexibility is key. Unlike annual plans requiring upfront payment, monthly renewals appeal to users who prefer a “test-and-continue” approach, which is common in a competitive streaming market.

“However, the predominant disadvantage of annual subscriptions is the cost-benefit factor. Monthly subscriptions may offer access to a larger and more personalized content library, with consumption patterns varying based on consumers’ willingness to pay for exclusive, relevant content. This model allows platforms to dynamically adjust to user behaviour, test content preferences, and refine pricing strategies. The downside is the increased churn risk, as customers can easily opt out if the platform does not offer expected value, leading to less predictable revenue streams compared to annual plans,” Sengupta added.

Easier on wallet vs discounts
Dhiraj Khanna, associate vice-president of Mudramax, agreed that Indian consumers are price-sensitive and prefer smaller, manageable monthly payments. While monthly plans are easier on the wallet initially, they are more expensive over time. He pointed out that annual plans offer significant discounts, making them attractive for those who can afford to pay upfront.

“For Indian consumers, convenience and value are key factors in their purchase decisions. While this may vary depending on the context and the specific type of product or service, increasingly, with busy lifestyles, consumers appreciate services that save time and (allow) easy access. To balance convenience and value, OTT platforms need to strategically craft their subscription models, offering a mix of monthly and annual subscription options, along with incentives like trial periods, add-ons, and bundled services, among others,” Devyani Ozarde, managing director and lead – media and entertainment, Accenture in India, said. LiveMint