Netflix has been making some significant changes to how its pricing plans all over the world recently. The company released its latest earnings report for the second quarter of 2019 last night, and it’s not looking too good for the firm.
Following the recent pricing hikes, Netflix has lost around 130,000 subscribers in the United States. It’s also only gained 2.7 million global subscribers, much lower than the predicted 5 million. Netflix isn’t too disappointed with the results, though, blaming the loss in subscriber counts on the price increases. It also isn’t too scared of the upcoming competition from Apple, HBO, Disney, etc. — with CEO Reed Hastings claiming that its position in the market is “excellent”.
Netflix is also now looking at new subscriber plans designed for specific regions to help it grow its business in markets like Asia. The company has been testing a low-cost, mobile-only plan in India as early as March of this year, and it’s confirmed the new plan in its quarterly earnings report.
“After several months of testing, we’ve decided to roll out a lower-priced mobile-screen plan in India to complement our existing plans. We believe this plan, which will launch in Q3, will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where Pay TV ARPU is low (below $5),” Netflix noted. According to TechCrunch, Netflix isn’t saying exactly how much this new plan costs, or whether Netflix plans to bring it to other regions. But from what we have heard in the past, the new plan costs only Rs 250, which is half the price of its regular plan that comes at Rs 500. The new service only offers standard-quality streaming in a single device, by the way.
Netflix testing new low-cost plans could help it get an edge over all the upcoming streaming services. Considering the fact that not everyone can afford to pay for the full-fledged service in some markets, it’d make sense to offer cheaper plans that are specialised for customers in those regions. It’s not only making the service more accessible for customers, but it’s also allowing Netflix to grow its subscriber numbers without affecting its profit too much.
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