TBI Tech & Analysis: What Netflix price cuts say about Lat Am & Caribbean ambitions

Netflix’s Sintonia

Netflix is seeing strong subscriber growth in Latin America & the Caribbean, but has cut the cost of signing up to the service. Omdia’s Juan Villegas explains what this move tells us about the streamer’s strategy in the region.

For the first time in Latin America & the Caribbean, Netflix reduced its pricing for its pay tiers: Basic, Standard, and Premium. The markets affected by this news are Bolivia, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Nicaragua, Panama, Paragua, and Venezuela.

In tandem with this, almost all local currencies had some level of devaluation against the US dollar over the past year, with Paraguay seeing the greatest decrease on all tiers as its currency saw the deepest devaluation, at -5.11% year on year (YoY).

In 2022, Netflix implemented a series of measures to counteract password sharing in Latin America, where it has been building its offering of non-English programming. The Dominican Republic, El Salvador, Guatemala, and Nicaragua were some of the countries involved in tests such as “adding household,” but the streamer halted these measures after only two months.

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This is the first time Netflix has decreased its prices in the region, an interesting development considering it continues to see strong subscription growth. Indeed, over the last quarter, the company fell just shy of 42 million subscriptions with a net addition of 1.76 million, its highest peak since 2Q20 during the pandemic.

Prices fell to almost half of their previous values:

Most of the Basic plans fell from $7.99 to $3.99 (-50%), in Panama from $8.99 to $4.99 (-44%), and in Paraguay from $8.29 to $3.99 (-52%). Standard plans fell from $10.99 to $5.99 (-45%), in Panama from $12.99 to $8.99 (-31%), and in Paraguay $11.49 to $5.99 (-48%). The Premium tier saw the smallest though still substantial decrease, from $13.99 to $7.99 (-43%), in Panama from $15.99 to $12.99 (-19%), and in Paraguay from $14.69 to $7.99 (-46%).

These reductions are a clear sign that Netflix is looking to up the ante in an increasingly crowded market, falling much more closely in line with Disney+ and HBO Max, whose monthly prices are $7.49 and $5.99 respectively.

This assessment was taken from Omdia’s TV & Video Industry Developments Impact Brief – February 2023, which is available to read in full here.