Netflix lowers pricing in several nations to increase subscriptions, yet its stock price falls.
Netflix Inc. (NFLX.O) announced on Thursday that it has lowered the cost of some of its subscription plans as the streaming juggernaut attempts to maintain membership growth in the face of fierce competition and constrained consumer spending.
The stock decreased by almost 5%, falling behind the general market and heading for its worst day in more than two months.
The streaming sector has experienced fierce competition over the past year as a pandemic-driven boom fades and customers reduce spending out of concern for a potential recession, prompting businesses to reconsider their strategy.
The price reductions, according to the Wall Street Journal, which broke the news first, took place in a few Middle Eastern, sub-Saharan African, Latin American, and Asian nations.
The discounts only apply to select Netflix subscription tiers in particular markets; according to the Journal, in some circumstances, the cost of a subscription was cut in half.
The U.S. and Canada markets are saturated, therefore Netflix, which has operations in more than 190 countries, has been attempting to increase its market share in emerging overseas markets. It announced plans earlier this month to strictly prohibit the sharing of passwords for accounts on its streaming platform.
After losing customers in the first half of 2022 as competitors like Paramount+ and Disney+ vacuumed in subscribers, the firm added roughly 7.6 million new subscribers in the fourth quarter of that year.
But during the final three months of 2022, average revenue per membership fell across all areas.
“We are constantly looking for ways to enhance the membership experience. We can vouch for the fact that in some nations we are altering the prices of our plans “a company spokeswoman stated.