While it is still the largest video streaming service worldwide, Netflix wants to expand its user base in areas outside North America and Europe, particularly in Asia. However, its current pricing tier may not appeal so much for countries in the region that have a significantly lower per-capita income. So now the streaming giant says it is willing to test out a lower-priced tier and version in these markets in order to attract more users to either switch to them or to add the service to their current subscriptions.
Currently, the cheapest plan that Netflix offers, at least in the U.S., is a $7.99 per month subscription. They have also never lowered its prices and instead have maintained or even increased their fees in major markets. But according to Chief Executive Officer Reed Hastings, they are open to experimenting with their pricing in order to reach those who may not be convinced to shell out that much to watch streaming videos on demand.
There are three tiers in Netflix’s pricing options right now but don’t expect them to cut the price of the lowest one in order to appeal to potential viewers in Asia. Instead, what we might see is a totally different and less expensive fourth tier or an alternative version of the service. Of course, it will have different features than the current subscription options that are being offered.
There are a lot of other video streaming services in Asia and they are offering subscription plans that range from $2 – $5 per month. So Netflix is already considered a premium service. Growth has been significantly slower in the region ever since they entered three years ago. But it is considered a “fertile territory for new customers” hence their willingness to experiment with pricing.
They are also looking at original and localized content as they have recently announced 17 new shows from five Asian countries just last week. There are around a hundred film and TV projects currently in development across India, Korea, Japan, Thailand, and Taiwan. They are also looking at hiring from Seoul, Tokyo, and Mumbai. And Netflix has also recently set up a local headquarters in Singapore. They are indeed serious.
VIA: Bloomberg
