The Reason Netflix Is Testing Cheaper, Mobile-Only Subscription

Because the growth is in emerging, international markets where mobile is frequently not just the primary, but the only tech device owned. JL


Julia Alexander reports in The Verge:

Netflix is exploring a mobile-only subscription plan that would cut the membership cost by approximately 50%. Phones and tablets account for 35% of global Netflix signups. The growth of mobile Netflix users, especially in countries where mobile usage outpaces time spent watching traditional TV or time on a computer, is constant. Netflix is testing these new tiers in international markets. Mobile-first continents, like Asia and Africa, are seeing the biggest increase in consistent mobile users,

The number of people who use mobile devices as a primary option to stream Netflix is growing worldwide, which makes it no surprise that the company is reportedly testing a new payment plan specifically targeting mobile users.

A report from Malaysian newspaper The Star says that Netflix is exploring a mobile-only subscription plan that would cut the membership cost by approximately 50 percent. Phones and tablets account for 35 percent of global Netflix signups, according to a report from Recode earlier this year. The growth of mobile Netflix users, especially in countries where mobile usage outpaces time spent watching traditional TV or time on a computer, is constant.

Cameron Johnson, Netflix’s director of product innovation, said in July that 60 percent of members around the world now open Netflix’s mobile app at least once a month to watch a TV show or movie. Part of Netflix’s product plan includes creating better tools for mobile users who can now download TV shows for offline viewing. The company is leaning into customers who want to spend more time on their phones and tablets, and it’s seemingly introducing a cheaper tier specifically for those customers.

a mobile-only subscription plan could cut the membership cost by approximately 50 percent

Right now, it appears Netflix is testing these new tiers in international markets. That makes sense considering mobile usage as a primary option for browsing and consuming entertainment is increasingly popular in Asian and East Asian countries. Mobile-first continents, like Asia and Africa, are seeing the biggest increase in consistent mobile users, according to a study from earlier this year. While mobile usage continues to expand and grow in the United States — 77 percent of Americans use smartphone devices, according to a Pew report from this year — it’s still not as big of a market.

Netflix also wants to expand its reach in international markets since that’s where the biggest concentration of growth is. Nearly 79 million of Netflix’s total of 137 million subscribers are international, according to a recent earnings report. Offering cheaper plans targeted at primary mobile users is a way to increase that growth.

The Verge has reached out to Netflix to see if there are plans to bring mobile-specific subscription tiers to the United States.