Netflix to Offer Lower Price Monthly Plans in Some Markets on Experimental Basis

Netflix to Offer Lower Price Monthly Plans in Some Markets on Experimental Basis


Netflix CEO Reed Hastings said in an interview that the company will offer lower-priced streaming plans on an experimental basis in some markets. He didn’t specify where or when the test will be conducted. In its major markets, the company maintains high priced plans as it invests a lot of money in adding content and attracting subscribers with local productions. In fact, it has hiked subscription rates in its bigger markets to balance them with the investment for more content. The idea of lowering subscriptions was mentioned in a conference a few weeks ago, but this is the first time that the company talks about going in for it on an experimental basis.

In the US, Netflix has three subscription plans. The basic plan that supports only one screen and offers non-HD content costs $7.99 a month. The $10.99 plan offers HD streaming and supports two screens. The premium plan that costs $13.99 has Ultra HD streaming and supports four screens. Analysts believe that the idea is not to reduce the rate of the basic plan to make it more affordable. A new plan will be introduced instead, that will cost less and offer a different set of features. The basic idea behind the test is to see whether a lower monthly rate would attract more subscribers.

Netflix entered the Asian markets about three years ago. In an event in Singapore last week, the company announced 17 new shows from five countries (Japan, India, Thailand, South Korea and Taiwan) in the region. At present, it is developing more than a hundred film and TV projects in these countries. However, it is assessed that the growth in the region is too slow, even after three years of presence. In India, for instance, Netflix’s target is 100 million subscribers whereas the number of subscribers there is yet to cross 2 million. It will be an uphill task for the company to come anywhere near the target, with the current subscription rates. Lower price monthly plans may bring about a change in such markets.

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