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 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.
But how long can it last? The dramatic decreases will likely be felt in Netflix’s Q1 earnings, where the market could punish it for dwindling revenues even if subscribers significantly increase.
Our take: Reducing prices significantly in so many regions is a risky move in a market that has ruthlessly punished streamers for missing revenue expectations. But if the lower price leads enough consumers to sign on with Netflix, it can make significant gains in foreign markets where its competitors are showing weakness.
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