Netflix has cut prices in some markets to attract more subscribers

Netflix has slashed its prices in some of its smaller markets in the latest shift in the video streaming service’s efforts to keep up with recent renewed subscriber growth amid more strong competition and inflationary pressures are pushing many households to curb their spending.

The lower prices that began rolling out earlier this week affect more than 30 of the roughly 190 countries where Netflix’s streaming service is available — a stretch that has enabled the company to attract nearly 231 million subscribers. subscriber. Areas that got lower prices included the Middle East markets of Yemen, Jordan, Libya and Iran; European countries such as Croatia, Slovenia and Bulgaria, and sub-Saharan African markets.

Netflix has not changed its prices in any of its biggest markets, including the US, where it has raised rates regularly over the past four years to help offset the costs of a programming lineup that includes hits. series like “The Crown” and “Stranger Things.”

Although Netflix has established itself as the largest video streaming service, it is competing for viewers with other deep-pocketed rivals including Apple, Amazon and Walt Disney Co. at the same time stubbornly high inflation is causing more people to tighten their budgets.

Factors that contributed to Netflix losing nearly 1.2 million subscribers in the first half of last year, prompting the company to introduce an ad-supported option to its service that costs just $7 per month in the US – less than half the price of most. popular plan. That helped Netflix bounce back in the second half of last year when it added 10 million subscribers, a recovery that made longtime CEO and co-founder Reed Hastings comfortable stepping down last month. .

In another attempt to get more subscribers, Netflix began to suppress the widespread sharing of passwords that enabled an estimated 100 million people around the world to free load its service. Netflix has already curbed the practice in Latin America and several other countries, including Canada, New Zealand, Portugal and Spain earlier this month. New rules governing the use of the same password in multiple households are expected to be imposed in the US by the end of March.

Netflix’s new co-CEO Greg Peters announced last month in a quarterly conference call that the company is exploring ways to attract more subscribers in smaller markets, though he did not say whether what specifically about using lower prices as an enticement. “There’s a pool of people around the world in countries where we’re not deeply embedded, and we have more opportunities to attract them,” Peters said.

On the same call, Peters also indicated that Netflix sees little need to drop prices in markets, such as the US, where its service has already proven its value to longtime subscribers. “We think of ourselves as an irreplaceable asset,” Peters said.

However, Netflix lost 920,000 customers in the US and Canada last year, leaving it with 74.3 million subscribers in the region at the end of December. Despite subscriber declines, Netflix’s price increases in the US and Canada helped boost its revenue in the region by 9% last year to nearly $14.1 billion. Financial profits have become more important to Netflix because it now puts more emphasis on revenue growth now that it is becoming more difficult to attract more subscribers.

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