Netflix Inc. will offer low-cost plans in 116 more countries as the company seeks to replicate the success of its cheaper India pricing.
The U.S.-based video streaming platform reduced prices in additional 116 countries in the quarter ended December in an attempt to increase adoption and maximise revenue in the long term, according to its statement.
The OTT streaming services are betting on cheaper plans to grow in emerging markets. India is a key target with growing internet penetration with more than 850 million internet users.
Netflix dropped its prices in India in December 2021 by 20–60%. That increased engagement in 2022 by about 30% and aided growth in paid net additions, according to Spencer Neumann, chief financial officer at Netflix. Forex-neutral revenue growth accelerated from 19% in the year prior to 24% in 2022. Every market is going to "play out like that".
Ted Sarandos, co-chief executive officer Netflix, said, "We have to get the pricing and the payment methods right. India is a big price because it's an enormous population of entertainment-loving people."
"We're doing the creative part and we're getting the pricing better, and there's always lots of promise to continue to grow in India," he said.
Still, the 116 countries represent 5% of Netflix revenue, said Neumann, adding that cheaper pricing won't have any near-term impact. "it's something that will hopefully benefit us over the long term."
Netflix got off to a muted start to 2023, missing Wall Street estimates by adding only 1.75 million customers in the first quarter. Investors were expecting 2.41 million new customers.
Netflix is looking at scaling up content in India." As the content opportunity continues to scale and our ability to access the market and thrill those audiences continues to grow, we can do quite well in India," said Sarandos. "We're a long way from that. We're still investing against it, and I think they will ultimately do great in India."
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