Netflix Determines Pricing Of Its Service Based On Local Piracy

Netflix

Netflix revealed in a quarterly Earnings call, that its strategy is to determine the price of its service based on local piracy rates, so it can better compete in places where piracy is rampant.

With nearly 60 million subscribers globally, Netflix is a giant in the world of online video entertainment. In terms of providing access to popular TV-shows and movies, the company’s biggest competitor is piracy. Netflix says it understands that destroying piracy is an endless and perhaps fruitless battle, so it will instead view piracy as normal competition and adjusts its monthly price point accordingly.

Piracy is a governor in terms of our price in high piracy markets outside the US,

We wouldn’t want to come out with a high price because there’s a lot of piracy, so we have to compete with that,

David Wells, Netflix Chief Financial Officer

So far, Netflix’s strategy, both on the pricing and content side of the equation, seems to be working exceedingly well. Not only is Netflix doing well in countries with traditionally high piracy rates, its subscriber rate continues to trend upwards dramatically. In the last quarter alone, the company has added 4.9 million new subscribers, a figure which is 20% higher than Wall Street analysts were expecting.

Netflix is also trying to use piracy to its advantage by bringing some of the more popular pirated shows in order to get a better grasp on which shows are worth purchasing and bringing into the Netflix umbrella.

Source: Reuters

Tags:

Amarnath Natarajan Avatar

Help Us Grow

If you like this post, please share it with your friends.

You are free to copy and redistribute this article in any medium or format, as long as you keep the links in the article or provide a link back to this page.

Subscribe to Newsletter




Privacy Settings

Privacy & Cookie Overview

Our website uses cookies to provide you with the best user experience possible. These cookies are stored in your browser and perform essential functions such as recognizing you when you return to our website, as well as helping us to understand which sections of the website you find most useful and engaging.

To learn more, you can read our Privacy & Cookie Policy or reach out through our Contact form.

Strictly Necessary Cookies

Strictly Necessary Cookies must always be enabled to ensure the proper functioning of this website and to allow us to provide you with excellent service. These cookies are also essential for saving your cookie preferences.

Google Adsense

We use Google AdSense to keep this site free by displaying relevant ads. AdSense requires essential cookies that cannot be disabled, but you can manage other cookies. We respect your privacy and provide options to control non-essential cookies.

For more details on how Google handles your data, visit Google's Data Usage Policy. Please review our Privacy Policy for more information on how we protect your data.

AddToAny

We use AddToAny for social sharing. It doesn’t store cookies, ensuring a privacy-friendly experience. AddToAny complies with GDPR and CCPA by default.

For more, see their Privacy Policy.

OneSignal

We use OneSignal to send notifications to users who opt in. OneSignal complies with GDPR and is certified under the EU-US and Swiss-US Privacy Shield frameworks.

For more, see their Privacy Policy.

3rd Party Cookies

This website utilizes third-party cookies, which can enhance your experience and support our ongoing efforts to improve our services.

Google Analytics

We use Google Analytics to collect anonymous data, such as visitor numbers and popular pages, to improve user experience and site performance. Keeping this cookie enabled helps us refine the site based on visitor activity.

For more information, see Google’s Privacy Policy.

Discover more from Prime Inspiration

Subscribe now to keep reading and get access to the full archive.

Continue reading