Netflix CEO Reed Hastings said the video streaming company had no plans to get lower prices in the competitive Indian market and that the comments of an executive who suggested otherwise had been "misunderstood."
In an interview with Reuters On November 9, Hastings did not know that Netflix had three price levels in India: 500 rupees ($ 6.90) for a basic plan, 650 ($ 9.00) for a standard plan and 800 rupees ($ 11) for the premium. Those prices are only slightly lower than the company charges in the United States.
But in India, Hastings said, "we see the typical mix in these three plans that we see in many other countries such as the United States, indicating that we don't have a price problem. Because if it were, everyone will be in The plan lower prices.
When asked directly if that meant the company had no lower price plans in India, he said: "Right."
Hastings' comments followed an event in Singapore where the company presented 17 new original productions for Asia, including nine for India. He said that local production was a key driver for new subscribers in India and elsewhere, but he refused to provide specific figures on the number and growth of subscribers in Asia.
Netflix was launched in India two years ago and has gained followers among a young middle class and technology expert in a country where video consumption of all kinds is increasing. He had great success in July with the release of Sacred Games, a thriller based on Bollywood star Saif Ali Khan.
However, local industry participants claim that Netflix prices will make it difficult to compete against national competitors such as Hotstar, Amazon's satellite television provider, Tata Sky, backed by 21st Century Fox.
But Hastings said Netflix could still thrive amid cheaper options.
Now it is true that YouTube is free, and Amazon is basically free, and the cable is extremely cheap because it is backed by advertising. Up to a point, that creates an expectation for the consumer, "he said. But he added that the cost of Netflix in India was" like going to the cinema 2-3 tickets a month, but you can see much more.
Price Experiments
Following Netflix's October earnings announcement, product manager Greg Peters said: "We will experiment with other pricing models, not only for India but for everyone, allowing us to expand access by providing a level of prices that fall below our current lowest level. level. "
It was widely understood that this indicated that a low price plan would come to India. But Hastings said that was not the case.
"It was misunderstood as the decision that we will have lower prices in India, which is not something we are particularly contemplating," he said.
Hastings recognized the limitations of the current pricing strategy in a country where per capita income is one tenth of that in the United States.
"It's true that if you're trying to reach a billion homes, that probably won't work," he said. "But if you are focused on the English language, in English entertainment homes, there is a much higher income.
He described the high-level approach as "a practical and realistic place" to begin with and that the company finally hoped to address a wider audience.
Netflix currently has more than 130 million subscribers worldwide. Hastings said the Indian market could deliver the next 100 million subscribers.
