Netflix to experiment with lower-cost plans

Netflix said it will test a lowerpriced version of its film and television streaming service in some markets to boost sales.

The company hasn’t committed to lowering prices anywhere, but it does want to experiment, Chief Executive Officer Reed Hastings said in an interview Friday. He didn’t say when or where the test would be conducted.

A lower-priced offering would be a departure for Netflix, which has maintained or raised prices in major markets as it adds content and invests in local productions to draw subscribers. While the company alluded to experiments with cheaper subscription deals in a conference call last month on its earnings, this is the first time Netflix has said it will test a lowerpriced tier in some markets.

Netflix offers subscriptions at three price levels, and doesn’t plan to lower that of its cheapest tier. Instead, executives are formulating an alternate version of the service, or a fourth tier, that will have different features and cost less.

Netflix streaming first gained traction in the U.S. by offering a buffet of TV shows and movies for a fraction of the cost of pay TV, encouraging millions of people to cancel their cable and satellite subscriptions — also known as cordcutting. Now, the world’s largest streaming service is looking for growth in countries where percapita income is significantly lower.

Prices vary a bit by territory, and the cheapest U.S. plan is about $7.99. Many in Asia, including PCCW Ltd.’s Viu, offer a free service and a paid service, with the latter typically priced between $2 and $5 a month.

“Leaving prices where they are, we are a very premium service,” said Todd Yellin, Netflix’s vice president of product.

Netflix, the world’s largest streaming service with more than 130 million subscribers, is looking to Asia as fertile territory for new customers after entering the region three years ago. The company announced 17 new shows from five Asian countries at an event last week in Singapore, where it hosted more than 100 journalists and social media influencers from across the region.

The service is developing more than 100 film and TV projects across India, Korea, Japan, Thailand and Taiwan and has set up a local headquarters in Singapore. It is also looking to hire in Seoul, Tokyo and Mumbai.