Report: Netflix experimenting with lower-priced options in Asia

Netflix is reportedly testing a cut-price mobile-only subscription offering in Malaysia in an apparent bid to open up the service to more users in this market.

According to a Reuters report, Netflix’s mobile plan is priced at MYR 17 (€3.59) per month, compared to MYR 33 for its basic plan in the country.

“We are testing to understand consumer interest in a mobile-only plan in some countries,” said the company in a statement to Reuters. “Generally, we try out lots of new ideas at any given time, and they can vary in how long they last and who sees them. We may not ever roll out the features or elements included in a test.”

The news follows much speculation about Netflix’s plans to offer cut-price offerings in Asian and other global markets in order to reach more subscribers.

Speaking on the company’s third quarter earnings call last month, Netflix’s chief product officer, Greg Peters, said that Netflix may look to make faster inroads into emerging markets like India by cutting prices.

“We’ll experiment with other pricing models – not only for India, but around the world – that allow us to broaden access by providing a pricing tier that sits below our current lowest tier,” he said.

However, at an event in Singapore last week, Netflix CEO Reed Hastings told Reuters that plans for cheaper pricing in India had been “misunderstood” and that the company did not have plans to reduce its pricing in this market.

Speaking to India’s The Economic Times this week, Hastings described its entry level INR 500 per-month (€6.14) pricing as “great value” compared to the INR 200 – INR 220 it costs to go to the cinema. Currently Netflix’s three pricing tiers in India cost INR 500, INR 650 and INR 800 per-month.

Asked specifically by The Economic Times if the company would look to lower prices in order to reach mass-market appeal in India, Hastings said: “You may be right for our second hundred million [subscribers], but for our first hundred million I think we’re pretty good pricing. That’s what we’re focused on right now.”

“We’re still mostly in English so we’ve got a lot to do to broaden out over the next couple of years, supporting many more regional languages and storytelling styles. Someday I’m sure our pricing will evolve in more options but for the next couple of years I think what we’ve got is a very cost-effective option.”

In India, Hastings said that Netflix is initially focusing on people who watch entertainment in English – a segment that he conceded “a fraction of the Indian market”. However, in time he said the SVOD service aims to expand into more Hindi-based content and then Tamil and Guajarati as it targets other regions.

For more about Netflix’s Indian and Asian growth plans click here.