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Netflix looks to penetrate Asia market with cheaper ‘mobile-only’ package

Netflix has decided to test its first mobile-only package in Malaysia and a “few” other countries for a reduced price of just US$4 per month, seemingly with a view to rolling out the initiative to other developing markets in Asia – if the trial is deemed to be a success.

At half the price of the basic Netflix package in the country, the move is designed to tap into a market that leaped a generation of technology and went straight to mobile.

The change of direction also signals that the company may have finally accepted that its premium-priced product was not going to get the desired traction it was looking for in Asia.

While the streaming service has some 137 million customers across the globe, more than half of them are in the United States.

Add to that the billions of dollars the American company is spending on new content – US$13 billion in 2018 alone – and it is clear that penetration in new markets is necessary to make the firm’s finances stable in the long term.

Financial analysts say the company has already clocked up around US$20 billion in debt.

In Asia, the company is also competing in a crowded marketplace where prices have been kept artificially low in order to nurture large audiences that the firms hope will become loyal customers, once exposed to the brands and their content.

This is true of Hooq, Hotstar, iflix and Viu – where prices can be as low as US$3 per month. All of these players and Netflix itself are investing heavily in developing Asia-specific content, as well as Western shows and films.

Netflix chief executive officer Reed Hastings admitted recently that the firm did want to experiment with pricing models.

A company spokesperson told Mumbrella: “We are always looking for ways to make Netflix more enjoyable and more accessible to people all over the world.

“In this case, we are testing to understand consumer interest in a mobile-only plan in some countries.

“Generally, we try out lots of new ideas at any given time, and they can vary in how long they last and who sees them. We may not ever roll out the features or elements included in a test.”

The company has also started testing adverts for its own content of late, which it labelled “”surfacing recommendations” between shows that users can skip or opt out of.

However, external ads could be a step too far for Netflix. Entertainment research firm The Hub has claimed that the service would lose a quarter of its subscribers, if it started running paid marketing campaigns.

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