Netflix slashes prices in some countries to increase subscriptions

Netflix has announced that it will slash the prices of subscription plans in some countries. The reduced prices come as the streaming giant looks for a way to maintain the growth in subscriber numbers as it faces increased competition and a strain on consumer spending.

Netflix reduces the prices of its subscription plans

Netflix has been looking for a way to increase the number of subscriptions as it faces increased competition from other streaming platforms. Moreover, consumer numbers have also been dwindling, and one way to raise these numbers is to reduce the cost of subscriptions.

Netflix shares dropped by around 5%, and they have been performing poorly compared to other shares in the market. The shares reported one of its worst days in over two months, and the drop could be attributed to the negative outlook about the company even as it looks for ways to bolster its revenues.

Over the past year, there has been a notable increase in competition within the streaming industry because of the pandemic. Moreover, consumers have been reducing spending over fear of a possible economic recession. The fears of a recession have forced companies to change their strategies.

Netflix is viewing a reduction in subscription costs as one of the ways that it can maintain high subscription numbers and help the company boost its revenues and cause investor confidence, which will drive up the share prices.

Netflix has added around 7.6 million subscribers during the fourth quarter of 2022. The increase in subscription numbers was a significant turnaround for the company, given that it lost customers during the first half of 2022. During the first six months of 2022, rival streaming platforms like Disney+ and Paramount+ reported increased subscribers.

The average revenue per membership also dropped notably across multiple regions during the last three months of 2022. The company has now said that the drop in subscription costs was a way of boosting customer experience and boosting the company’s revenues.

“We’re always exploring ways to improve our members’ experience. We can confirm that we are updating the pricing of our plans in certain countries,” a spokesperson from the company explained.

Netflix launches an ad-supported plan

Besides reducing subscription costs, Netflix also rolled out a new subscription plan with ads at a lower cost. While this plan costs notably less than the standard plans, it was not immediately rolled out in all countries.

Netflix announced the release of a “Basic with Ads” plan towards the end of last year. This plan offers a new, cheaper subscription plan to launch ads for the first time since this platform was released as a streaming service in 2007.

This subscription plan was released in 12 countries globally in November. Some countries where this plan is supported include Australia, the US, and the UK. The company might roll out this plan to other countries in the future.