Nov 13: Netflix Inc is set to test a cheaper version of its film and television services in some of its markets. The move is to increase its sales. Reed Hastings, Chief Executive Officer at Netflix, has been quoted as saying by news reports that the company has not yet decided to lower the price but is ready for an experiment. However, he did not reveal when and where the test will be conducted.
Netflix had maintained and raised prices in prominent markets. In order to increase the subscriber count, the company had added content and began investing in local production. It is the first time where the company had talked about testing lower price options in some of its markets.
There is three price level offers provided by Netflix but do not intend to lower these as the cheapest tier. For the cheapest tier, the executives are coming up with alternatives or the fourth tier with lesser price and various features.
Providing a buffet of TV shows and movies for a fraction of the cost of pay-TV, Netflix became a huge hit in the US market. This led to cord-cutting where people left the cable and satellite subscription for Netflix streaming. Now the company is moving to begin cheaper services in markets where it has a lower per- capita income.
The prices offered will vary according to territory. In the US, the cheapest price at which Netflix is offered is $7.99. In Asia, most of the online streaming companies including Viu, owned by PCCW, offer free and paid services. For the paid services the company usually charges $2 – $5 a month. Todd Yellin, Netflix’s vice president of product said that keeping the prices constant, the company is a premium service.
The world’s largest streaming service operator has around 130 million users and is to concentrate on the Asian market to make it a huge success. The company entered the Asian market three years ago. At an event held in Singapore last week, the company announced 17 new shows from five Asian countries. As many as 100 journalists and social media influencers were present at the event.
It has developed more than 100 film and TV projects across India, Korea, Japan, Thailand, and Taiwan. A local headquarters for the company is set up in Singapore. Moreover, it also has plans to employ people in Seoul, Tokyo, and Mumbai.
It is being reported that, with its current strategy, the US company is not going to get a subscriber count of 100 million in India. Netflix is offered at Rs 500 per month, Rs 650 and Rs 800 in India while Star India owned Hotstar Premium is offered at Rs 199.