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 In an interview with Reuters on Friday, Hastings noted that
Netflix had three price tiers in India: 500 rupees ($6.90) for a
basic plan, 650 ($9.00) for a standard plan and 800 rupees ($11)
for premium. Those prices are only modestly lower than what the
company charges in the United States.
But in India, Hastings said, "we see the typical mix across
these three plans that we see in many other countries like the
U.S., which would indicate that we don’t have a pricing issue.
Because if it was, everyone would be on the lower price plan.”
When asked directly if that meant the company had no plans for
lower prices in India, he said: "Correct."
Hastings' comments followed a Singapore event where the company
introduced 17 new original productions for Asia, including nine
for India. He said local production was a key driver of new
subscribers in India and elsewhere, but he declined to provide
specific figures on Asia subscriber numbers and growth.
Netflix launched in India two years ago and has won fans among a
young, tech-savvy middle class in a country where video
consumption of all kinds is soaring. It scored a big hit in July
with the release of “Sacred Games”, a hard-boiled thriller built
around Bollywood star Saif Ali Khan.
Local industry players, however, say Netflix’s prices will make
it hard to compete against domestic competitors like 21st
Century Fox-backed Hotstar <DIS.N>, Amazon's <AMZN.O> Prime
Video and satellite TV provider Tata Sky.
But Hastings said Netflix could still thrive amid cheaper
options.
“Now it is true that Youtube is free, and Amazon is basically
free, and cable is extremely inexpensive because it’s
ad-supported. To some degree that creates a consumer
expectation," he said. But he added that the cost of Netflix in
India was "like going to the movie theater 2-3 tickets a month,
but you get to watch a lot more.”
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PRICING EXPERIMENTS
Following Netflix's October earnings announcement, chief product
officer Greg Peters said: "We’ll experiment with other pricing
models, not only for India, but around the world that will allow us
to broaden access by providing a pricing tier that sits below our
current lowest tier."
That was widely understood to signal that a low-price plan was
coming to India. But Hastings said that was not the case.
"It got misunderstood as a decision that we are going to have lower
prices in India, which is not something we are particularly
contemplating," he said.
Hastings acknowledged the limitations of the current pricing
strategy in a country where per-capita income is a tenth of that in
the United States.
“It’s true that if you’re trying to get to a billion households,
that probably wouldn’t work," he said. "But if you’re focused on
English-language, English-entertainment households, there is a much
higher income.”
He called the high-end focus "a practical, realistic" place to start
and that the company eventually hoped to target a broader audience.
Netflix currently has more than 130 million subscribers worldwide.
Hastings has said the India market could deliver the next 100
million subscribers.
(Reporting by Jonathan Weber; Editing by Nick Macfie)
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