Netflix testing lower prices in some markets

Netflix remote control image
Netflix is considering adding a less-expensive tier with fewer features in some markets. (Pixabay/Creative Commons CC0)

Netflix is testing lower prices for its service in some international markets to better grow and compete with other local streaming services.

According to Bloomberg, the company is looking into offering a fourth pricing tier—its current U.S. plans range from $7.99 per month to $13.99 per month—that will include different features than its existing three pricing tiers.

Chief Product Officer Greg Peters hinted at the new pricing model during the company’s latest earnings call in October.

“Now we’ll experiment with other pricing models, not only for India, but around the world that allow us to sort of broaden access by providing a pricing tier that sits below our current lowest tier and we'll see how that does in terms of being able to accelerate our growth and get more access. But even on the existing model, we feel like we have a long runway ahead of us in India,” Peters said, according to a Seeking Alpha transcript.

RELATED: Amazon, Netflix getting trounced in India SVOD market by Star India's Hotstar

As the report points out, Netflix is priced considerably higher in India than Star India’s Hotstar, which costs less than half the price of Netflix’s lowest tier in that country.

And Netflix could use more of a competitive edge in India, a market that could offer quite a bit of international customer growth.

According to recent research from Jana, Amazon and Netflix are getting trounced in India's SVOD market by Hotstar. Hotstar holds 69.7% of the market in India, while Amazon hold 5% and Netflix holds just 1.4%.

While Netflix considers price decreases in some international markets, the service has recently raised prices in other markets including the U.S., Australia, Brazil, Canada, U.K., France and Germany. And those price increases don’t appear to be adversely affecting the company’s subscriber growth momentum.

During the most recent quarter, Netflix added 6.96 million net subscribers—1.09 million new subscribers in the U.S. and 5.87 million internationally. The new subscriber total was well ahead of the 5 million net additions the company had forecast. The additions bring Netflix’s total subscriber count to 137 million (130 million paid).

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