Netflix to launch $5 service for mobiles

The streaming giant Netflix will use one of the oldest tricks used in business to try to win new users: lower the price.

To achieve this, it announced a new "low-cost" service that will have an initial launch in India, and will probably be priced below $5.

Without specifying an exact date or the name of this new product, the Reed Hastings company indicated that the launch will take place in the third quarter of 2019 to expand its business in a market where the average revenue per user of pay television it is less than US $5.

The service will be launched initially in India, with a price that would be equal to or less than US $5, according to initial statements.

"After several months of testing, we have decided to launch a lower price plan for mobile displays in India, to complement our current plans," the company noted in its quarterly letter to shareholders.

"We think we need to offer a lower price to improve accessibility, but also to complement the structure we currently have," said Gregory Peters, Netflix CPO.

It is worth mentioning that two days ago a 12% drop in Netflix shares was reported. Only in the United States they lost around 130 thousand subscribers.

As a precedent, in November 2018, Netflix carried out a pilot test of the “low cost” service in Malaysia, because it already foresaw that it would have to resort to this alternative if required.

Globally, it was expected that this year, the streaming company will gain 5 million users, but they only reached 2.7 million. Which has obviously worried his investors.