Netflix is ​​making the subscription cheaper in these countries

Over 231 million people in more than 190 countries have a Netflix account - even though you can choose from numerous streaming providers. But the US group no longer plays the role of the industry leader by a long shot: Amazon Prime Video, Disney Plus, but also Paramount Plus are hot on its heels.

So new customers are needed. The video-on-demand platform wants to achieve this in several ways: on the one hand, cheaper subscription models are being introduced with advertisements, on the other hand, password sharing is to become less attractive due to higher costs. Global inflation isn't stopping at the tech company either: price increases have already been announced for several Western European countries over the course of the year.

However, according to a report by the AP news agency, Netflix is ​​now planning to reduce subscription costs in countries such as Yemen, Jordan, Libya and Iran, but also in some European countries such as Croatia, Slovenia and Bulgaria. In some places, such as Malaysia, the change has already come into force. According to a report by the online magazine Techcrunch, more than 100 regions will benefit from the new prices.

Only series and film fans from countries whose market has played a rather small role for Netflix can look forward to cheaper subscriptions. Depending on the purchasing power of the country, the savings are between 20 and 60 percent of the original subscription price. However, customers in Germany and the USA should not expect any discounts in the near future. In the US, prices have increased for about four years in a row. Also to finance the extremely high production costs of blockbusters like "The Crown" or "Stranger Things".

Netflix's new co-CEO Greg Peters hinted back in January during a quarterly conference call that the company was looking at ways to gain more subscribers in its smaller markets. "There are a number of people around the world in countries where we don't have as much of a presence, and we have more opportunities to reach them," said Peters.

The reasons for the turnaround in the battle for new subscribers are varied, as Marc Sachon, professor at the IESE Business School in Barcelona in the Department of Production, Technology and Operational Management, explains. Back in 2003, he published a case study on the then relatively unknown streaming giant. "Netflix is ​​under pressure to continue its 26-year history of growth," he told WELT.

Competitors such as Amazon Prime Video, which with its expertise in data analytics can provide its subscribers with even more tailored recommendations, or Disney Plus with its immense range of titles would make global growth more difficult for Netflix, Sachon said. That explains the focus on the new markets: "Here, however, the purchasing power is significantly lower, which leads Netflix to carry out price experiments. For example, in India there was a Netflix package exclusively for mobile phones for two dollars a month.”

The streaming provider is currently still the global market leader, measured by the number of subscribers. However, in 2021, the company saw its subscriber count drop by 1.2 million. As a result, it wasn't until January 2023 that longtime CEO and co-founder Reed Hastings resigned from his post at Netflix.

"If Netflix's revenue growth, which is highly correlated with subscriber count, flattens out, there's a risk that competitors will take market share and the stock will come under pressure. So Netflix is ​​trying to grow in 'new' markets - and reduce issues like 'account sharing' in core markets," says Sachon. So far, Netflix has always managed to solve the problem areas creatively.

Experts believe that Netflix could gain up to 100 million subscribers just by taking action to curb account sharing. In Canada and Portugal, things have already started to get serious. For an additional fee of between four and eight US dollars (equivalent to between 3.80 and 7.60 euros), an additional account can be created in an existing account. The US market is to follow at the end of March. Users in Germany could soon be put a stop to their account sharing.

According to co-CEO Peters, Netflix sees little need to cut prices in markets like the US. The service has already proven its value for long-term subscribers there. "We see ourselves as a non-substitutable good," Peters said. The variant with advertising content, which was only introduced in Germany in November 2022, is significantly cheaper at EUR 4.99 than the standard subscription for EUR 7.99 per month. As a customer, you have to put up with advertising. The new price reductions in the Middle East and Eastern Europe as well as some African countries apply to all subscription models.

Cheap prices or not - it doesn't help if the content is not good: