Netflix is planning to redesign its pricing strategy to offer varying degrees of services and features at different price points to customers across the world, Moneycontrol (MC) has reported. The development comes after the video-streaming company tasted success in India through a similar price revision exercise.
The Indian experience
Netflix slashed the prices of its services in India by 20 to 60 per cent in December 2021 as the competition from other digital content streaming companies intensified in the country.
The price cuts, on top of an improved list of the available content on the platform, helped Netflix grow engagement in India by nearly 30 per cent year-on-year. Additionally, revenue growth increased to 24 per cent in 2022 as compared to 19 per cent in 2021, the report stated.
The company said in a statement that "Learning from this success, we reduced prices in an additional 116 countries in Q1. While they represented less than 5 per cent of our FY22 revenue, we believe that increasing adoption in these markets will help to maximise our revenue longer term."
The price cuts have been commissioned to attract new customers while retaining the existing ones. Reportedly, Netflix registered a slowdown in its growth after a pandemic-led bump in subscribers.
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The password-sharing problem
Moreover, the company has been looking for ways to crack down on password sharing in select countries for the past few months.
To this end, Netflix is planning the rollout of a paid password-sharing option that will allow users to share their accounts with people they don't live with. This will carry an additional cost. This feature has been rolled out in four countries so far, which include Canada, New Zealand, Portugal, and Spain, in 2023.
Netflix estimates show that there are over 100 million people who use their services but do not pay for them, the MC report said. This hampers its ability to improve investments and features for subscribers that pay Netflix.