Netflix Has a Surprising Amount of Pricing Power in India
Netflix (NASDAQ: NFLX) has struggled to make significant headway in India, one of the most promising markets for any internet company. With just a few million subscribers in the country of more than 1.3 billion people, Netflix introduced a new mobile-only plan last year, costing just 199 rupees a month (about $2.80 at launch, but just $2.60 at today's exchange rates).
Management says it's seen good results with that mobile-only plan and adapted the offer for other south Asian countries. The low-priced option may have been especially popular in the first quarter, as Netflix saw its average revenue per user fall 3% on a foreign-exchange-neutral basis in the Asia-Pacific region.
But it turns out Netflix may have room to raise prices in India. It seems 90% of Indians would pay more for their subscription, according to a new survey from Jefferies analyst Brent Thill. Netflix is unlikely to raise prices anytime soon, especially given the economic and competitive environment amid the COVID-19 pandemic and the recent expansion of Hotstar from Disney (NYSE: DIS). Still, the response is another indication of the revenue growth potential for Netflix in international markets, where penetration and ARPU remain relatively low compared to the United States.
Source Fool.com
