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nScreenNoise – Netflix bites bullet, offers cheap Asia tier

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Netflix is experimenting with a lower pricing tier in Malaysia and releasing more local content. Will the strategy garner more subscribers in the Asian markets?

Netflix offers lower pricing tier in Malaysia (0:32)

The world’s largest SVOD provider has finally offered a lower tier pricing option, but only in Asia. The $4 a month tier only allows streaming to the smartphone and only provides standard definition video. This is the first time Netflix has ever offered a cheaper option or lowered its prices.

Netflix is investing heavily in original content (1:49)

According to Goldman Sachs Netflix is investing $12-13 billion this year, with 85% going towards original content. Seventeen original productions have been announced in Korea, India, and SE Asia. However, Ted Sarandos, Chief Content Officer at Netflix, says Netflix is planning 100 regional productions throughout Asia.

Most of Netflix’ subscribers are not Asian (3:20)

Netflix has 137 million subscribers worldwide but few of them are from Asia. According to Media Partners Asia “Asia plays a modest role in the company’s (Netflix) growth story”… it contributes less than 5% of the global base at the end of 2017.

Will this be a good move for Netflix? (4:24)

In the past we have been critical of Netflix’ strategy in emerging markets, but these changes will be a step in the right direction. The focus on new local original content and the targeting of the smartphone are especially important. Unfortunately, service providers such as iFlix and HOOQ have been exercising this strategy already for years. Will it be too little too late? Only time will tell.

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