Netflix is planning to improve its pricing strategy to offer a range of price points and feature sets to customers worldwide after a price cut in India helped the streaming giant boost user engagement and revenue growth in the country.
What Happened? According to Netflix CFO Spence Neumann’s comments during a Q1 2023 earnings call, in December 2021, Netflix reduced its service prices in India by 20-60% due to intense competition and a growing appetite for digital content.
The company said that improved content and lower prices increased engagement in India by nearly 30% year-on-year, while revenue growth rose to 24% in 2022 compared to 19% in 2021.
According to a letter to shareholders, Netflix plans to increase adoption in international markets by reducing prices in an additional 116 countries in Q1. Although these countries represented less than 5% of Netflix’s FY22 revenue, the company believes that increasing adoption in these markets will maximize its revenue in the long term.
The company is looking to attract new customers and retain existing ones, especially in international markets such as India, where the growth of its paid member base slowed down after a pandemic-driven subscriber bump.
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Netflix, which likes to see itself as a premium streaming player in India, launched its cheapest plan for a smartphone-dominant streaming audience in the country at ₹199 per month in July 2019. In December, it slashed the price of this plan to ₹149.
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