Netflix is reportedly considering lowering subscription prices in areas where the streaming giant is yet to captivate the locals.
In an interview reported by Bloomberg, CEO Reed Hastings reportedly said the company may test lower prices to secure more subscribers in places where the average income is somewhat lower.
In India, for example, Netflix has less than two million subscribers, but Hastings believes it could eventually bring in 100 million customers.
However, pricing is definitely a barrier to adoption. The company charges 500 rupees in India, which is the equivalent of $6.85/£5.33. That’s much cheaper than tariffs in the UK and the US, but still very expensive in local terms.
YouTube is naturally the most popular video service, but Star India’s Hotstar Premium costs the equivalent of $2.71/£2.12. The company acknowledges its service is certainly a premium product in India, whereas it has proved a cheaper alternative to satellite and cable TV in many western countries.
“Leaving prices where they are, we are a very premium service,” Todd Yellin, Netflix’s vice president of product has said.
To help with the Asian expansion, Netflix is developing over 100 projects in India, Korea, Japan, Thailand and Taiwan. It also has a local HQ in Singapore. Hastings didn’t offer any more details on where and when the prices will be lowered, or whether it would be permanent.
However, given that Netflix is pushing prices higher in some territories, it’s interesting that he company is considering lowering fees in order to attract new audiences.
“At what point do these guys start saying we need to change our pricing,” Vivek Couto, of Media Partners Asia told Bloomberg. “He’s not going to get 100 million subscribers in India with the current strategy.”
Do you think Netflix offers good value for money? Would you consider cancelling at any point in order to save money? Or can Netflix count on your tenner a month?