Netflix chief executive Reed Hastings said that the streaming Movie company had no plans for cheaper prices in the hotly competitive India market and executive comments suggesting otherwise had been”misunderstood.”
In an interview with Reuters on Friday, Hastings noted that Netflix had three price tiers at India: 500 rupees ($6.90) to get a basic program, 650 ($9.00) for a normal plan, and 800 rupees ($11) for superior. Those prices are just modestly lower than that which the provider charges in the USA.
But in India,” Hastings said,”we view the typical mix across those three plans we see in many other countries like the U.S., which would imply that we don’t have a pricing problem. Because if it was, everyone would be about the lower cost program.”
Hastings’ remarks followed a Singapore event where the company introduced 17 new original productions for Asia, such as nine to India. He said local production was a key catalyst of subscribers in India and elsewhere, but he declined to give specific figures on Asia subscriber amounts and growth.
Netflix started in India two years ago and has won fans among a young, tech-savvy middle class in a state where video consumption of all kinds is soaring.
But Hastings said Netflix could thrive amid cheaper choices.
“Now it’s a fact that Youtube is free, and Amazon is basically free, and cable is extremely inexpensive since it is ad-supported. To some extent that produces a customer anticipation,” he said. But he added that the price of Netflix in India was”just like going to the movie theater 2-3 tickets per month, but you get to watch a lot more.”
Following Netflix’s October earnings statement, chief product officer Greg Peters stated :”We’ll experiment with other pricing models, not just for India, but around the world which will allow us to broaden access by supplying a pricing grade that sits below our current lowest tier.”
That was widely known to signal that a low-price strategy was coming to India. But Hastings said that wasn’t the case.
“It got misunderstood as a decision that we are likely to have lower costs in India, which is not something we’re particularly contemplating,” he said.
Hastings acknowledged the limitations of the present pricing strategy in a country where per-capita income is a tenth of that in the USA.
“It’s true that if you’re trying to get to a billion households, that probably would not work,” he explained. “But if you’re focused on English-language, English-entertainment households, there is a much higher income.”
He called the high-end concentrate”a sensible, realistic” place to begin and the company eventually expected to target a wider audience.
Netflix now has more than 130 million subscribers worldwide. Hastings has stated the India marketplace could deliver the next 100 million readers.