Netflix Inc. said on Thursday that it has reduced the cost of its subscription plans in several regions in order to maintain subscriber growth in the face of fierce competition and tight consumer spending.
The stock dropped over 5%, behind the wider market and on track for its worst day in more than two months.
The streaming sector has witnessed severe competition in the last year as a pandemic-driven boom fades and customers cut back on spending due to recession worries, prompting companies to reconsider their strategy.
According to the Wall Street Journal, which broke the story first, the price reduction occurred in nations throughout the Middle East, Sub-Saharan Africa, South America, and Asia.
The discounts apply to specific tiers of Netflix in those markets, with the cost of a membership being slashed in half in some circumstances, according to the Journal.
Netflix, which operates in over 190 countries, has been aiming to expand its presence in new foreign areas as the marketplaces in the United States and Canada become saturated. It announced steps earlier this month to restrict password sharing for accounts on its streaming platform.
After losing customers in the first half of 2022 as rivals like Paramount+ and Disney+ gained subscribers, the business added roughly 7.6 million in the fourth quarter.
Nonetheless, average income per membership fell across regions in the final three months of 2022.
“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 for the company said.
The spokesperson did not provide any further information on the price decreases.