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Netflix says subscription fee will not change in Cambodia

Netflix CEO Reed Hastings gives a keynote address on January 6 at the CES 2016 Consumer Electronics Show in Las Vegas, Nevada. AFP
Netflix CEO Reed Hastings gives a keynote address on January 6 at the CES 2016 Consumer Electronics Show in Las Vegas, Nevada. AFP

Netflix says subscription fee will not change in Cambodia

Netflix Inc, which operates the world’s biggest internet television network, will not raise its subscription price in Cambodia amid concern rolling price increases in the US are causing the company’s subscribers to cancel the popular streaming service.

“The price increase does not affect new markets [including Cambodia] that Netflix is available in since the global launch in January,” the company yesterday said in a statement.

The US-based digital entertainment company saw its stock price tumble this week after reporting its worst member growth in three years as many customers dropped its streaming video on demand (SVOD) service complaining of price increases.

Netflix announced in 2014 that it would gradually increase the monthly charge for its basic $7.99 service, but existing members were “grandfathered in” at the old rate for a year. With that lock-in period now passed, their monthly charges have gone up by as much as $2.

In its latest quarterly financial results, Netflix reported adding just 160,000 US subscribers, far short of its cautious projection in April of 500,000. Meanwhile, churn – a term used to describe customers cancelling the service – “ticked up slightly and unexpectedly”.

Jonathan Friedland, a spokesman for Netflix, said in an email yesterday that new international markets, including Cambodia, were never on the agenda for price hikes as the monthly charge increases only “apply to subscribers from before 2014”.

Netflix launched in Cambodia in January 2016 as part of a global rollout that added 130 new countries. The basic service is available for a rate of $7.99 per month.

Friedland declined to comment on the size or growth of Cambodian subscriptions, stating that the company does not share subscription figures by individual country.

However, competition is growing for the Cambodian market as an increasing number of high-quality SVOD platforms give consumers more alternatives.

Among the most anticipated is iflix, a Malaysia-based Netflix clone that was scheduled to launch in Cambodia by mid-2016, but now reportedly looking to the end of the year.

The fast-growing company has already rolled out service in Malaysia, the Philippines, Thailand and Indonesia, and currently boasts 4 million subscribers.

While iflix lost its first-mover advantage to Netflix, it could gain ground in Cambodia on the comparative advantages of more Asian programming and an expected lower monthly charge.

In addition, CEO Mark Britt has indicated the streaming service would look to bundle its services with local mobile phone operators, a move that would make iflix accessible to millions of their subscribers.

“Partnering with telcos, as we have done in other markets, allows us to accelerate our growth by making iflix immediately available to each telco’s customer base,” Britt told the Post in October.

Both SVOD services face stiff competition from local internet-based digital television operators, such as SingMeng Telemedia Group, which has already extended its services beyond the Cambodian capital to Siem Reap and Sihanoukville.

Alice Xie, CEO of SingMeng Cambodia, said the company’s digital terrestrial television (DTT) and over-the-top television (OTT TV) platforms provide affordable alternatives to Netflix that are more tailored to the needs of local viewers.

“We provide broadband internet service and TV, while Netflix’s strength is in its dramas and movies,” she said.

SingMeng’s DTT service offers live television for $2 per month, while its OTT service adds broadband internet access, more channels and SVOD for as low as $17 per month.

Xie said the low entry price on DTT was aimed primarily at Cambodia’s rural population, who are unlikely to be able to afford Netflix’s $7.99 monthly fee, but Singmeng’s content was the key “differentiator”.

“For our OTT we have live TV with international content such as BBC, CNN, Fox and Discovery, as well as regional content from China and Vietnam, and a combination of local channels,” she said.

“Maybe we have some competition [from Netflix,] but it is limited because their content is all international.”

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