MUMBAI: Denying market buzz about Netflix’s plan to introduce cheaper subscription plans in India, the streaming video giant’s CEO Reed Hastings said that an executive’s comments suggesting otherwise had been “misunderstood.”
Hastings in an interview with Reuters noted that the OTT platform had three price tiers in India: Rs 500 ($6.90) for a basic plan, Rs 650 ($9.00) for a standard plan and Rs 800 ($11) for premium. Compared to the amount Netflix charges in the US, these prices are only modestly lower.
“We see the typical mix across these three plans (in India) that we see in many other countries like the US, which would indicate that we don’t have a pricing issue. Because if it was, everyone would be on the lower price plan,” he said.
After posting Q3 result in October, chief product officer Greg Peters said in an earnings call, “We’ll experiment with other pricing models, not only for India, but around the world that will allow us to broaden access by providing a pricing tier that sits below our current lowest tier.” This comment was widely perceived as an indication of the company’s plan to introduce lower pricing.
“It got misunderstood as a decision that we are going to have lower prices in India, which is not something we are particularly contemplating,” Hastings said against this backdrop.
However, Netflix boss did not deny that it’s not easy to penetrate a billion household with this subscription rate in Indian economy. Rather focusing on English-language, English-entertainment households will help to have a higher income. According to him, the high-end focus is “a practical, realistic” place to start and eventually targeting a broader audience.
Hastings said Netflix could still thrive although Netflix has competitors in India including YouTube, Hotstar, Amazon who offer cheaper options for the audience. As YouTube is free, and Amazon is cheaper and cable is extremely inexpensive, that creates a consumer expectation. But Netflix boss added that the cost of Netflix in India was “like going to the movie theatre 2-3 tickets a month, but you get to watch a lot more.”
While Netflix currently has more than 130 million subscribers worldwide, Hastings has said the India market could deliver the next 100 million subscribers.
