Perhaps Netflix didn’t get the memo about raising streaming-subscription prices. And the other one about subscriber counts no longer being the best measurement of a service’s success.
Netflix has dropped monthly subscription pricing in more than 30 countries (or more than 100 territories, listed below) globally, IndieWire has confirmed. The service’s “Basic” tier, the ad-free one, is seeing the highest percentage drop across many of the territories, including Central and South America (CSA), Sub-Saharan Africa (SSA), the Middle East and North Africa (MENA), Central and Eastern Europe (CEE), and the Asia Pacific (APAC) regions, according to Ampere Analysis. Those areas will receive discounts ranging from 20 percent to 60 percent on the plan, the market researcher wrote; here in the U.S. we pay $9.99/month for that one. The price drop will happen automatically for both new and existing subscribers.
“We’re always exploring ways to improve our members’ experience,” a Netflix spokesperson told IndieWire on Thursday. “We can confirm that we are updating the pricing of our plans in certain countries.”
But why is Netflix suddenly being so generous? The service has basically maxed out its reach here in the U.S. and Canada, with the greatest growth potential remaining in many of the world’s poorer regions. Those potential users are much more likely to use ad-supported streaming services, but Netflix’s “Basic with Ads” plan is currently only available in 12 countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States. Those countries are not the ones getting this discount — generally, they don’t need it.
Without access (yet) to an ad-supported Netflix model, subscribers in the less-affluent regions could use a break. Much like Netflix has raised prices in places subscribers can absorb the price hike, this downward pricing turn is a reflection of the economic realities in poorer areas, a person with knowledge of the decision told IndieWire.
Expect more “Basic with Ads” regions to roll out, and one day, Netflix may add a FAST (free, ad-supported streaming television) service — an option completely reliant upon advertising, and not monthly subscriptions, for revenue. At the end of 2022, Netflix reported having 230.75 million global paid subscribers; that included the new ad-supported option.
“With Netflix reportedly planning to charge consumers extra to have additional ‘out of home’ users access their account, these price drops potentially cancel out the extra cost to subscribers currently sharing accounts,” Ampere wrote. “While this move will have a negative average revenue per user (ARPU) impact on Netflix in these emerging markets, it could drive subscriber additions amongst consumers yet to take the service.”
As part of its fourth-quarter earnings announcement, Netflix said it will roll out “paid sharing” later this quarter (details, including pricing, which will vary by region, is still to come). Based on trials in Latin America, the company expects some subscribers will initially cancel the service as a knee-jerk reaction, but overall revenue growth will soon follow. Netflix maintains that more than 100 million households currently share accounts and thus, in its eyes, are not monetized properly.
“Some of it is economically driven and so part of what we’re trying to do is make sure we are being responsive to that and finding the right price points, whether in terms of an individual account or an extra-member affordance,” Netflix’s new co-CEO Greg Peters said at the time.
The Netflix spokesperson we spoke to for this story declined to comment on many of the specifics reported by Ampere, including pretty much everything below.
Not all “Standard” (here, the popular $15.49 plan) tier subs in the same markets, like Vietnam and Malaysia, will get a discount, but many will, the firm wrote. In the Philippines, the discount will be 13 percent; elsewhere, it will go as high as nearly 50 percent. The Philippines, Vietnam, and Malaysia will see no discount on the “Premium” (here, $19.99/month) tier; all other discounted markets will receive a pricing decrease of 17-43 percent. In many cases, like in Indonesia, Egypt, Ecuador, Morocco and Croatia, the new “Standard” price is just the old “Basic” price — essentially it’s a free upgrade in resolution (from 720p to 1080p) and an allowance for an account to have two concurrent streams.
Netflix is also cutting prices 25-33 percent in certain regions for its mobile-only tier, a popular option in markets with low levels of broadband access. More populated regions like India, Indonesia, Thailand, Malaysia, Philippines, Vietnam, Pakistan, and Nigeria will not get the mobile discount.
Ten markets — Indonesia, Thailand, Malaysia, Philippines, Egypt, Ecuador, Vietnam, Morocco, Croatia and Kenya — will see discounts to localized pricing, per Ampere Analysis. (Localized pricing helps subscribers avoid volatility due to currency fluctuations.) Netflix has a combined total of more than 10 million subscribers in those markets.
Below is the full list of territories in which Netflix dropped prices, according to Ampere, in alphabetical order. Find more of their details here.
Bosnia & Herzegovina
British Indian Ocean Territory
Central African Republic
Congo – Brazzaville
Congo – Kinshasa
Papua New Guinea
São Tomé & Príncipe
St. Vincent & Grenadines
Wallis & Futuna