Pricing Strategy within the U.S. Streaming Services Market: A Focus on Netflix's Price Plans

Online streaming wars are intensifying. Netflix is known as the market leader in the streaming business. However, since 2019, Netflix has been losing subscribers in the United States and is at a turning point where it needs to reassess its current position in the market. While Netflix is losing dominance, rivals Amazon Prime and Hulu continue to gain market shares. Studies from Deloitte and PricewaterhouseCoopers indicated a new shift in the streaming landscape caused by the abundance of streaming options and rising subscription costs. Recent surveys showed that consumers are excited about new streaming services, such as Disney +. Nearly two-thirds of consumers intend to terminate or downgrade one or more of their current subscriptions to make room for a new service. Moreover, it seems that consumers want ad-supported options. In Deloitte’s latest Digital Media Trends survey, 65% responded that they would watch ads to eliminate or reduce subscription costs. Seventy percent of Hulu’s subscribers choose its lower-priced ad-supported plan. NBC recently launched its own streaming service, Peacock, with a free ad-supported option. This opposes Netflix’s brand identity of “no ads” and premium differentiation. With increasing pressure from competition and the growing risk of subscriber loss, Netflix needs to diversify its price plans. The company could try implementing the lower-priced mobile-only plan they are currently testing or plan to test in other regions. Netflix should also consider features or benefits for loyal subscribers to maintain a stronger consumer base.