Reed Hastings took an uncharacteristic step earlier this month and slashed Netflix prices in India by 60pc.
The co-founder and chief executive of the streaming giant was pursuing a unique approach in the world’s biggest democracy, having previously raised prices in the UK and Europe to support heavy spending.
It came amid pressure from rivals Amazon and Disney+ Hotstar – an Indian subscription streaming service that is ultimately operated by Disney. The move was a defensive one that spoke of the changing tides in the world of entertainment.
But while Netflix is grappling with a crop of rivals challenging its reputation as an entertainment disruptor that has seized millions of viewers from traditional broadcasters, its battles do not end there.
An internal staff backlash over jokes made about transgender people in Dave Chappelle’s Netflix special, as well as pressure from sceptical analysts to be more transparent over data, is forcing Hastings to react.
The company behind The Crown and Squid Game is now showing all the foibles of a seasoned corporate, just as its subscriber growth is starting to stutter.
Tom Harrington, of Enders Analysis, believes the potential for the business “remains enormous”, but its priorities are starting to change.
“I think Netflix will approach pre-Covid like growth in 2022, but that growth will continue to be mostly outside of the US, UK and Canada,” he says.
“This is why the corporate narrative now concentrates on its non-English speaking content pipeline, its market-leading dubbing, subtitling and meta-tagging operations, which give the service a boost in those territories. The response from investors will depend on how much they mind about the tougher conditions in Netflix’s domestic market.”
Investor nervousness has already started to set in. About $25bn (£18bn) was wiped off Netflix’s market value in April when shares plunged 11pc in response to slowing subscriber growth.
The company added almost 4m subscribers between January and March, missing expectations of 6m. At the time Netflix said it expected growth to rebound once new series of a string of popular shows were released, but pressure from its streaming rivals is evident.
Disney+ has amassed 179m subscribers since launching in November 2019. Netflix, meanwhile, has attracted 215m since it was forged in 1997.
“We had those 10 years where we were growing smooth as silk,” Hastings said in April. “It is just a little wobbly right now.”
The ship has started to steady. In the third quarter Netflix hauled in 4.4m subscribers – double the number for the same period last year, in part down to the popularity of Squid Game.
The South Korean hit dystopian drama has served as proof that Netflix is able to create new shows, with a global appeal, that can compete with huge franchises owned by Disney, such as Star Wars and the Marvel Universe.
