Netflix has great content. And it is spending significant amount of money to create original content that can further increase its appeal among the populace. However, the one great caveat with Netflix, is the fact that it is just so damn expensive. While folks in countries such as the US, are buying subscriptions left and right, Netflix has multiple competitors there. And in countries where it does not have much competition, it is facing penetration issues due top high price.

To contend with these issues, the streaming service has been ruminating about decreasing the price of its subscription tiers. Actually, that’s not entirely true. Instead of decreasing the price of existing tiers, the company could actually be planning to introduce all new subscription levels that are cheaper, and that offer lesser features as compared to the more expensive ones. If implemented properly, this strategy would not only increase its revenue from the get-go by netting it new subscribers, but it would also give it the chance to up-sell.

In India for instance, Netflix can potentially acquire 100 million new customers. Of course, it won’t be able to cover or capture all of them even with a low price tier, but even a percentage of this user base can translate into huge gains for the web streaming company.

In developing markets like India, Netflix is competing against services such as Hotstar and Prime Videos, each of which cost a fraction. In price conscious markets, good content is not all that matters. Netflix, which has been spending hundreds of millions to create original content, might want to divert some of the money towards subsidizing subscription, and getting more users on-board. After having spent 3 years in Asia, Netflix definitely needs a pivot in strategy to capture the hundreds of millions of potential customers and keep them from opting for cheaper services.

1 comment
Leave a Reply

Your email address will not be published. Required fields are marked *