Neflix Goes Mobile And Affordable

According to Techcrunch, Netflix is testing a mobile only subscription in Malaysia to make their services more affordable. This service will cost $4 a month.

CEO of Netflix Reed Hastings has been very vocal about his interest in investing in a more affordable offering, in order for the business to grow in highly populated regions like Asia. This makes a lot of sense as people are more likely to buy a smartphone than a laptop or smartTV.

In Malaysia, the $4 package is almost half what you would pay for the normal Netflix subscription. This pricing strategy is referred to as “market penetration” where a company aims to attract buyers by offering lower prices on goods and services. This makes sense in highly populated countries, especially where there are existing streaming services that compete with Netflix.

Reed Hastings has also been quite vocal about his aspirations to make a “move" in India with Netflix's classic original content and some local flavour. Netflix is the fifth largest OTT(Over The Top) video streaming company in India after Voot, Amazon and Sony Liv. However, India is not going to be a walk in the park because Hotstar already has over 75 million monthly active subscribers; four times more than the second largest video streaming company.



The above is an example of the opportunities that Netflix could take advantage of, efforts that are not priced into the share price by the market. We still think the growth for this business will come outside of the U.S. Netflix is rumoured to be testing this “market penetration” pricing strategy in other markets. I assume that it's in India and other Asian countries.