As Netflix pivots to a more aggressive pricing strategy, the company’s international ventures offer a tantalizing opportunity for growth compared with a saturated US market. However, Netflix will have to navigate local competitors, disgruntled customers, and a tenuous start to its ad-supported streaming tier if it wants to maintain its dominance.
The State of Play
New circumstances spur new tactics. Netflix was able to staunch its shocking loss in subscribers within North America by the end of 2022, but now it’s found a new focus: revenues. Membership growth has slowed in every region since 2021, with Latin America and Europe, the Middle East, and Africa ending last year with less than 5% growth, the US and Canada at -1.2%, and Asia-Pacific at 16.6%—nearly half the speed of the previous year. CEO Reed Hastings cited increasing competition and password-sharing as the cause.
While some tactics predate public subscriber losses, Netflix’s recent moves emphasize its prioritization of earnings over subscriptions:
- Increasing the availability of mobile-only plans to 81 countries
- Reducing prices in more than 116 markets
- Launching an ad-supported plan option in 12 countries
- Implementing new password restrictions in Latin America, Canada, New Zealand, Spain, and Portugal
