The news: In a year that’s seen streamers raising prices almost across the board, Netflix is taking a different approach. The company has lowered the cost of subscriptions in more than 30 countries as it tries to keep users with plenty of streaming options signed on.
- The reductions have landed worldwide in regions like Eastern Europe, sub-Saharan Africa, the Middle East, Southeast Asia, and Latin America, per The Wall Street Journal. In some countries, subscription costs were cut as much as 50%.
The road less traveled: At the start of the year, we predicted that most streaming services would implement price hikes in an attempt to increase shrinking revenues, which have become a priority for investors.
- Last year, Netflix’s first-ever subscriber loss ignited a panic about streaming saturation and subscription fatigue. But the rest of the year proved that consumers weren’t willing to cut off their entertainment sources, even as fear of a recession mounted (Netflix co-CEO Greg Peters said the company is a “non-substitutable good”).
- But with prices and uncertainty rising, cracks are starting to show. Disney, Paramount, and others have either raised prices or announced hikes, but the early response has been rough. Disney+ had its first-ever subscriber loss in its fiscal Q1 earlier this month, including decreases in key foreign regions like India, where it shed 6% of Disney+ Hotstar subscribers.
- By lowering its prices, Netflix is making a bet sacrificing short-term revenue gains for stronger adoption in competitive regions. And it might work: Netflix’s brand recognition is strong and consumers frequently rank its catalog as one of the best on offer.