Net­flix CEO says no plans for cheaper In­dia of­fer­ings

Oman Daily Observer - - INTERNATIONAL -

SIN­GA­PORE: Net­flix chief ex­ec­u­tive Reed Hast­ings said that the stream­ing video com­pany had no plans for cheaper prices in the hotly com­pet­i­tive In­dia mar­ket and that an ex­ec­u­tive’s com­ments sug­gest­ing other­wise had been “mis­un­der­stood.” In an in­ter­view, Hast­ings noted that Net­flix 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. Those prices are only mod­estly lower than what the com­pany charges in the United States.

But in In­dia, Hast­ings said, “we see the typ­i­cal mix across th­ese three plans 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.” When asked di­rectly if that meant the com­pany had no plans for lower prices in In­dia, he said: “Cor­rect.” Hast­ings’ com­ments fol­lowed a Sin­ga­pore event where the com­pany in­tro­duced 17 new orig­i­nal pro­duc­tions for Asia, in­clud­ing nine for In­dia. He said lo­cal pro­duc­tion was a key driver of new sub­scribers in In­dia and else­where, but he de­clined to pro­vide spe­cific fig­ures on Asia sub­scriber num­bers and growth.

Net­flix was launched in In­dia two years ago and has won fans among a young, tech-savvy mid­dle class in a coun­try where video con­sump­tion of all kinds is soar­ing. It scored a big hit in July with the re­lease of “Sa­cred Games”, a hard-boiled thriller built around Bol­ly­wood star Saif Ali Khan.

Lo­cal in­dus­try play­ers, how­ever, say Net­flix’s prices will make it hard to com­pete against do­mes­tic com­peti­tors like 21st Cen­tury Fox-backed Hot­star, Ama­zon’s Prime Video and satellite TV provider Tata Sky.

But Hast­ings said Net­flix could still thrive amid cheaper op­tions.

“Now it is true that Youtube is free, and Ama­zon is ba­si­cally free, and ca­ble is extremely in­ex­pen­sive be­cause it’s ad-sup­ported. To some de­gree that cre­ates a con­sumer ex­pec­ta­tion,” he said. But he added that the cost of Net­flix in In­dia was “like go­ing to the movie theater 2-3 tick­ets a month, but you get to watch a lot more.” Fol­low­ing Net­flix’s Oc­to­ber earn­ings an­nounce­ment, chief prod­uct of­fi­cer Greg Peters said: “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.” That was widely un­der­stood to sig­nal that a low­price plan was com­ing to In­dia. But Hast­ings said that was not the case.

“It got mis­un­der­stood as a de­ci­sion that we are go­ing to have lower prices in In­dia, which is not some­thing we are par­tic­u­larly con­tem­plat­ing,” he said. Hast­ings ac­knowl­edged the lim­i­ta­tions of the cur­rent pric­ing strat­egy in a coun­try where per-capita in­come is a tenth of that in the United States.

“It’s true that if you’re try­ing to get to a bil­lion house­holds, that prob­a­bly wouldn’t work,” he said. “But if you’re fo­cused on English-lan­guage, Englishen­ter­tain­ment house­holds, there is a much higher in­come.” He called the high-end fo­cus “a prac­ti­cal, real­is­tic” place to start and that the com­pany even­tu­ally hoped to tar­get a broader au­di­ence.

NET­FLIX WAS LAUNCHED IN IN­DIA TWO YEARS AGO AND HAS WON FANS AMONG A YOUNG, TECHSAVVY MID­DLE CLASS IN A COUN­TRY WHERE VIDEO CON­SUMP­TION OF ALL KINDS IS SOAR­ING.

— Reuters

Net­flix CEO Reed Hast­ings speaks at a me­dia event in New York.

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