Netflix is looking at a lower-priced subscription

Netflix is known to at least maintain or raise pricing in the key markets where it operates, but it it is the second time in a month that Netflix has admitted it might be looking at a lower-priced subscription tier in certain markets.

Gregory Peters, the chief product officer at Netflix, said that the company is looking to "experiment with other pricing models -- not only for India, but around the world -- that allow us to sort of broaden access, by providing a pricing tier that sits below our current lowest tier."

Netflix isn't expected to disturb its current three-tier pricing model. Instead, it's expected to add a fourth pricing tier that will cut down on more features but help it attract new users into the ecosystem.   The company wants to be better-equipped to cut its teeth in a market such as the Asia-Pacific region, where the value (lower internet speed etc) seems not aligned with the actual price points.

i.e. in India, the Netflix's base pricing plan of nearly $7 per month is much higher than the $2.75-per-month subscription charged by Hotstar (owned by Twenty-First Century Fox).   Also, the Asian streaming service Viu (owned by PCCW Limited) offers a monthly subscription that costs between $2 and $5 per month.  That’s quite a gap to bridge.

Given that Netflix has plans to reach 100 million subscribers in India (source ; Media Partners Asia), it seems to need a more aggressive pricing.

Netflix is also investing in higher value for the Asian market by building more content, investing in over 100 film and television projects across markets such as India, Japan, Korea, Thailand, and Taiwan.   

Looks like Netflix has an interesting value (pricing) challenge in Asia…

Source : Bloomberg