Netflix Launches Mobile-Only Plan in Malaysia
Netflix unveiled its RM17 ($4) mobile-only subscription plan for Malaysia last week on October 24th. The official announcement marks the end of Netflix’s test launch since end of last year, trialling a cheaper mobile-only plan against its basic subscription price of RM33 ($8). The new mobile plan will be ad-free, one-device usage (mobile or tablet) and subscribers can access Netflix’s full catalogue.
This comes as no surprise for a nation that has high smartphone penetration rate. Malaysian Communications and Multimedia Commission (MCMC) noted in its 2018 Consumers Survey that smartphones are the most popular device for shoppers to purchase goods and services online (78.3%), particularly among those below 30 years old. Further to that, 77.6% of Malaysia’s internet users download or watch online TV and videos. The new tailor-made mobile plan is one of Netflix’s many strategies to increase its international subscriber base. Since its expansion to southeast Asia in 2016, Netflix has continued to increase its localisation efforts through regional user interfaces and expansion of local content. Filmed and produced in Malaysia, Netflix’s first Chinese language original series, The Ghost Bride, is set to premiere in January 2020.
In July 2019, Netflix India rolled out its test of the mobile-only plan for INR199 ($3). Although Netflix has not fully disclosed and named all countries involved in this test plan, Netflix told The Verge, “We are always looking for ways to make Netflix more enjoyable and accessible. We will be testing different options in select countries, where members can, for example, watch Netflix on their mobile device for a lower price and subscribe in shorter increments of time.” Tiered subscriptions (daily, weekly, monthly) are common models used in emerging markets due to lower disposable incomes, coupled with low adoption of credit cards. MCMC notes online banking as the most preferred payment method for e-commerce transactions (62.1%), followed by credit card (32.7%).
In its latest Q3 2019 earnings, Netflix gained 6.7 million subscribers in total, with non-domestic subscribers accounting for 62% of growth. Netflix also revealed intentions to tackle password sharing. While its mobile-only plan seems promising and affordable, password sharing has been a common and regular practice amongst users. A premium plan of RM51 ($12) allows for five profiles and four devices to stream simultaneously. When shared and split amongst friends and family, that works out to RM12.75 ($3) per person – still relatively cheaper than RM17 (equivalent to the price of a large Starbucks Caramel Macchiato in Malaysia) that restricts users to mobile-only.
In this era of peak attention economy and subscription fatigue, the clamping down on password sharing could potentially leave subscribers opting out of Netflix and migrating to advertising video on demand (AVOD) services or piracy through peer-to-peer (P2P) file sharing. The upper hand Netflix has in this streaming war lies with its international expansion. In its third quarter letter to its shareholders, Netflix notes of “modest headwind” with regards to the Apple TV+ and Disney+ imminent launches but remains confident as “none have the variety, diversity and quality of new original programming that we are producing around the world”.