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Netflix cuts prices in some countries to boost subscriptions, shares drop
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(Reuters) -Netflix Inc said on Thursday it has cut prices of its subscription plans in some countries as the streaming giant looks to maintain subscriber growth amid stiff competition and strained consumer spending.
(Reuters) -Netflix Inc said on Thursday it has cut prices of its subscription plans in some countries as the streaming giant looks to maintain subscriber growth amid stiff competition and strained consumer spending.
The stock fell nearly 5%, underperforming the broader market and on course for its worst day in more than two months.
The past year has seen intense competition in the streaming industry as a pandemic-driven boom fades and consumers curtail spending over fears of a possible recession, forcing companies to rethink their strategies.
According to the Wall Street Journal, which first reported the news, the price cuts took place in some countries in the Middle East, sub-Saharan African, Latin America and Asia.
The cuts apply to certain tiers of Netflix in those markets – in some cases, the cost of a subscription was halved, the Journal reported.
Netflix, which operates in over 190 countries, has been looking to grow its share in newer international regions as the U.S. and Canada markets saturate. Earlier this month, it laid out plans to crack down on password sharing for accounts on its streaming platform.
The company added about 7.6 million subscribers in the fourth quarter after bleeding subscribers in the first half of 2022 as rivals such as Paramount+ and Disney+ raked in subscribers.
But average revenue per membership declined across regions in the last three months of 2022.
“We’re always exploring ways to improve our members’ experience. We can confirm that we are updating the pricing of our plans in certain countries,” a spokesperson for the company said.
The spokesperson did not give further details about the price cuts.
(Reporting by Eva Mathews in Bengaluru; Editing by Shinjini Ganguli and Krishna Chandra Eluri)
A subscription plan is a payment model where customers pay a recurring fee to access a service or product, such as streaming content from platforms like Netflix.
Consumer spending refers to the total amount of money spent by households on goods and services. It is a key driver of economic activity and can be influenced by various factors including income and economic conditions.
A price cut is a reduction in the price of a product or service, often used as a strategy to attract more customers or increase sales, particularly in competitive markets.
Subscriber growth refers to the increase in the number of individuals or households that subscribe to a service or product over a specific period. It is an important metric for companies in subscription-based industries.
Password sharing occurs when a user shares their account credentials with others, allowing multiple people to access a subscription service without each having their own account.
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