Netflix has launched trials of a lower-cost streaming plan, priced at around $4 per month — which will let you watch only on mobile devices.
The mobile-only tests are running in select countries, including Malaysia, Netflix said, and may not become widely available. The trials are aimed at appealing to smartphone-centric users in Asia and priced to be competitive with other streaming-video options.
The first confirmed test is in Malaysia, as first reported by The Star newspaper. In that country, the mobile-only tier — which is limited to standard-definition video — is priced at 17 ringgit per month, or around $4. That’s around half the cost of Netflix’s current entry-level Basic package, at RM33 ($7.90) per month, and 60% cheaper than the Standard two-stream HD plan at RM42 ($10).
Netflix last month announced that it was going to experiment with lower-cost pricing models in international markets, including in India. Those will be priced “below our current lowest tier,” chief product officer Greg Peters said on the company’s Q3 earnings interview last month. “We’ll see how that does in terms of being able to accelerate our growth and get more access.”
Apart from Malaysia and India, Netflix declined to identify the countries where it is planning to test the mobile-only plan. A company rep noted that Netflix routinely tests different concepts, which sometimes never become generally available.
“We are always looking for ways to make Netflix more enjoyable and more accessible to people all over the world,” a Netflix spokesman said in a statement to Variety. “In this case, we are testing to understand consumer interest in a mobile-only plan in some countries.”
As part of its international push, Netflix is investing heavily in local content, including a growing slate of original series and films in India and anime series including those based on “Pacific Rim” and “Altered Carbon.” The streaming giant has ordered 17 new original shows from Japan, India, Thailand and Taiwan.
But Netflix doesn’t tier its service based on access to programming. Its plans are based on use-cases and features, in the same way premium music-streaming services like Spotify and Pandora do. That’s in contrast to traditional premium content services (like pay TV), which are tiered based on programming tonnage: You pay more money, you get more channels.
In the U.S, Netflix offers three plans: the single-stream, non-HD Basic ($7.99 per month); the Standard two-stream HD tier ($10.99 per month); and Premium, with four streams and Ultra HD access ($13.99 per month).
Netflix’s latest pricing-plan test reflects the fact that Asia overindexes on mobile-video usage. To a greater extent than anywhere else in the world, Asian consumers treat smartphones as their “first screen.”
About 74% of all video plays in the second quarter of 2018 were on mobile devices in the Asia-Pacific region, according to online-video platform vendor Ooyala. That’s compared with 65% in Latin America, 56% in North America, and 54% in Europe, the Middle East and Africa (EMEA) for the same period.
“Even two years ago, you could make the argument that user-consumption patterns would not have allowed a subscription package like this to work. But now it does,” says Belsasar Lepe, founder and CTO of Ooyala, adding: “With 5G on the horizon, this will look even smarter.”
Netflix’s previous pricing tests have included a high-end streaming plan centered on Ultra HD and HDR features in select markets earlier this year, set at around $17 monthly. At this point, the company hasn’t moved to introduce it as a generally available option.