In an investigation of the leading subscription video-on-demand (SVOD) service’s international pricing, the analyst found that across the globe Netflix charges $8/month for one screen, $10/month for two screens and $12/month for four screens and HD content in its 130 new territories.
Yet examining such pricing’s relative terms when considering cost against typical pay-TV subscription ARPU in each territory, Digital TV Research found that while they seem fair and reasonable in major markets such as the US and UK, in places such as India they represent huge amounts. Indeed, while Netflix was asking Indians to pay two-and-a-half times as much as they would for the average pay-TV subscription, Australians were being asked to pay something amounting to only 9% of the country’s pay-TV ARPU. The research also noted that the established markets of Brazil and Mexico were also are low-priced compared with other new countries.
Attempting to offer an explanation for the strategy, the research firm quoted Netflix CEO Reed Hastings as saying that the company was trying – at least initially – to target the elite in developing markets. Even though prices are likely to be tweaked in the mid-term, the result of the action was that rates will appear high in the short term.