Netflix, the most popular streaming service in the world, has reduced its prices by up to 50 percent in over 30 countries. Given that the company increased prices in North America in the previous year, this move seems counterintuitive. Netflix is adjusting to changing viewer preferences post-lockdown and experimenting with a balance between revenue growth and subscriber acquisition.
Parts of the Middle East, Sub-Saharan Africa, Europe, Latin America, and Asia have implemented the price reductions for subscriptions. In 12 countries, Netflix has also introduced a cheaper plan supported by advertisements. In recent months, a number of other streaming services, including Disney+, Hulu, and Sling TV, have increased their prices.
According to John Hodulik, media and entertainment analyst at UBS Group AG, Netflix’s decision “clearly goes against recent trends, not only for Netflix but also for the entire streaming industry.” However, co-CEO Greg Peters stated in January that the company wants to identify price-hiking opportunities in order to fund new content investments. The regional price increases also enable Netflix to expand its subscriber base in global markets where its market share could be greater. Due to the global expansion of rival services such as Disney+, HBO Max, and Paramount+, it is likely that Netflix made its decision with this information in mind.
In addition to price reductions, Netflix is introducing a new monthly fee for users who share their login information outside of their homes. Netflix plans to enforce its password-sharing policies using IP addresses, device IDs, and account activity. Although Netflix’s terms of service have never permitted multi-household sharing, it has been allowed for so long that charging for account access to friends and family could irritate some subscribers.
In addition to being implemented in Canada, New Zealand, Portugal, and Spain, the programme has undergone a trial period in Latin America. The new fee in Canada and New Zealand is $8, in Portugal it is €4 and in Spain it is €6. The new payment structure will be implemented in the United States by early this year.
