Netflix cuts subscription fees in more than 100 countries
Streaming media giant Netflix (Netflix) cut subscription fees in more than 100 countries by as much as 50%, although most of them are low – income areas that do not contribute much to the overall revenue. Penetration rate, but the stock price still fell 3.35%.
“We’re always looking for ways to improve the member experience, and we can confirm that we’re updating pricing for our plans in some regions,” Netflix said in a statement Thursday.
The wave of price cuts affects 10 million subscribers, according to independent research firm Ampere Analysis. Countries ranging from Vietnam, Indonesia, Thailand, the Philippines and Malaysia in Asia to Nicaragua, Ecuador and Venezuela in Latin America, also covering sub-Saharan African markets including Kenya, and Yemen, Jordan and Libya in the Middle East and Iran. Some European countries, such as Croatia, Slovenia and Bulgaria, have also seen subscription price cuts.
The big streamers have been touting the quality of service they offer consumers relative to the monthly fees they charge, and some have raised prices in the U.S. in recent months.
Until last month, Netflix executives were talking about raising — not lowering — subscription prices. The company’s co-chief executive, Greg Peters, said on a conference call in January when it reported earnings that it was looking at areas that might be able to afford the price increases.
Netflix has cut prices overseas this time. According to Ampere, the basic plan will be cut by about 50% at most, and the rest will be between 17% and 25%.
“Netflix’s move is definitely against recent trends, where the percentage declines are significant in some places,” said UBS analyst John Hodulik.
Netflix shares fell as much as 5.2 percent to $317.47 in intraday trading, before narrowing their losses to close black at $323.65.
The Wall Street Journal commented that this price cut shows that large streaming companies are still figuring out what kind of pricing is the best combination to promote user growth and increase overseas revenue . Consumers can choose from local providers, regional streaming services and global platforms, and the market is highly competitive.
JPMorgan Chase, which gave Netflix an “overweight” rating, stated that “the overall pricing change will only affect about 10% of existing subscribers, and the total revenue contribution may be single digits”, that is, the price cut “may reduce total revenue by 2-4%.” . The drop in stock prices was an overreaction.