Netflix Lowers Prices in India and It's No Problem.
Netflix Lowers Prices in India and It's No Problem.
Shareholders need not panic, even as the world's giant premium video service has slashed prices in the world's second most populous country.
If you're a US-based Netflix (
NFLX (NASDAQ) $597,99 -6,57 (-%1,09) subscriber, it wouldn't be too surprising to expect prices to rise. This streaming service has increased its prices five times over the past eight years.
Despite this, Netflix is reducing its price in India by up to 60% on Tuesday.
Although the stock has opened below $600 for the first time in nearly three months, it should pose a problem for investors.
It's cut both ways.
Price action in India is not trivial. Although price cuts naturally have negative effects
Premium pricing poses a challenge if one wishes to go mainstream. The timing of the Netflix price cut in India is also interesting.
Netflix Lowers Prices in India and It's No Problem.
Amazon previously raised the monthly price of its video streaming service on Tuesday, while Netflix apparently had an ideal opportunity to raise its prices. Netflix has increased the number of its subscribers in America, despite the five-time increase in its prices since 2014.
No one has such pricing flexibility. Just as Netflix's next move in the lucrative US market is not a pushback, moving to a larger chunk of the Indian market has been a sign of a long-term strategy rather than short-term desperation.
Netflix knows what it's doing.
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