Netflix plans to cut subscription prices only for some countries in an effort to maintain subscriber growth. The competition is too tough, meanwhile subscription costs are too challenging for consumers. Last week, the stock plunged almost 5%. This underperformance shows that it has been the worst day in more than two months. Currently, competition in the streaming industry has been intense in post pandemic.
In addition, considering the latest issue on recession and inflation, consumers cut their spending leading to underperformance. Thus, Netflix strategizes its subscription plan. Based on the Wall Street Journal, subscription price cuts only apply to some countries. They are Middle East, Latin America, sub-Saharan Africa, and Asia. The journal announced that the cuts allow certain tiers of Netflix in those markets. They also added that the price of subscription is halved.
Netflix runs in more than 190 countries. They have been growing its share in newer international regions due to the saturation in the U.S. and Canada markets. Last month, Netflix plans to break down password sharing accounts in order to stream on the platform. This allowed Netflix to gain around 7.6 million subscribers in the fourth quarter. Meanwhile, the previously encountered subscribers decrease due to the tough competitors like Disney+ and Paramount+.
However, just in the last three months of 2022, the average revenue per membership plunged in many regions. Netflix’s spokesperson argued that the company keeps exploring ways to increase membership’s experience. They are positive that they could continue updating the pricing plans in some countries. However, the spokesperson did not give further comments about the price cuts.