Netflix is experiencing difficult times. Starting to actively go after accounts shared by different addresses is costing you a reputational crisis. We do not know how many casualties it has caused in these first days, but in a couple of months we will know the net balance globally.
At the moment, a piece of news has arrived that seems to be directly related to these measures, a massive price drop in more than thirty countries. It first took place in several Latin American nations, and now it has reached Croatia, Kenya, Vietnam, Egypt, the Philippines, Indonesia, Thailand…
Hopefully these sales reach Spain, but it does not seem very feasible. In addition, the reduction is reaching where surely we would need it the least.
They are not the same as Spain
Let’s take a detailed look at how much Netflix has lowered the price of each plan in each country among those that allow payment in local currency. It’s revealing.
Reading is easy: Not only is it that the countries with discounts are mainly developing countries, but Netflix is directing the discounts to the basic plans. In most, the premium plan remains the same or has been lowered by a smaller percentage than the basic plan.
In some of the countries affected by the discount, such as Croatia, Ecuador, Egypt or Morocco, the new prices assume upgrading from the basic plan to the standard plan paying the same amount. And open a new space between the plan with ads and the standard, closer in price.
The countries that this discount reaches represent a fairly low percentage of total Netflix subscribers, 4% according to Ampere Analysis. About 10 million subscribers.
If these countries have something in common, it is that they are territories where Netflix still has plenty of room for growth, something that we already know that the company sees as a sign to be able to show flexibility. That is, to be able to lower their price at the cost of the growth in the number of subscribers compensating them.
Spain is not a country with a lot of room for growth. According to data from December 2022 published by Kantar, 66% of Spanish households access video-on-demand services. And of that 66%, 65% use Netflix.
Can Netflix afford to lower its prices in Spain? Only if in their estimates there was an increase in new customers that exceeds the money that stops coming in. It doesn’t seem feasible with that market penetration. Although we will have to see what happens in the coming months and if the persecution of shared accounts has slight, notable or hard effects on the national figures.
At the moment, Netflix has been raising its prices every two years since it arrived in Spain in 2015. By calendar, it would be your turn to do it again at the end of this year if you repeat deadlines. Of course, this time is different because of that perfect storm between inflation, subscription fatigue, more competitors than ever and the crash that has meant the end of shared accounts.
Featured image: Javier Lacort with MidJourney.
