The US-based online streaming giant Netflix stated that it does not intend to increase its rates in the Middle East or United Arab Emirates in the short term. Netflix has just rolled out its service in the mentioned region early in 2016.
The online streaming corporation clarified this after certain reports came out that a price increase of about $1 a month will be implemented for some users in countries including the United Kingdom and the United States.
This move to hike prices reportedly drove away a lot of subscribers. Additionally, a significant drop in stock price was witnessed during this month after Netflix disclosed that it had only gained 1.54 million net new subscriptions for the second quarter of the current fiscal year. This figure is lower compared to the company’s projections of 2.5 million net new subscriptions for the period.
According to Chief Executive Officer Mr. Reed Hastings, “We are growing, but not as fast as we would like or have been.”
Yet, the online streaming company pointed out that these price hikes will not be employed worldwide.
“It is important to note that what is happening is not an across the board price increase,” stated Joris Evers, the Vice President and Head of Europe, Middle East and Africa Communications.
“We raised the price of our 2 screen/HD plan in 2015, but existing members were “grandfathered in” at the old rate for a year. That free-pass is timing out now. We have no current plans for further pricing changes,” Evers further added.
Netflix was released in the United Arab Emirates during the month of January as part of the company’s global expansion plan, under which the service was launched in 130 new countries all over the world.
The online streaming platform is offered with a free trial for one month, and monthly subscription rates start from $7.99 (Dhs 30) in the UAE.
According to Evers, “We are very pleased with the response to Netflix in the UAE and throughout the GCC states.”
“Of course we have only been available for a few months and we have a lot of work to do to further establish ourselves, but the start has been encouraging,” he further stated.
Based on a report by Ovum, which is an advisory firm, subscription video on demand service revenues are estimated to grow by 25 percent annually by the year 2019. Moreover, they will also be responsible for 70 percent of all OTT revenues in the mentioned region.
Apart from that, the advisory firm’s report also forecasted that more than a million subscribers in Middle East will watch streamed content by the year 2019.
As of the time of writing, the NFLX stock is changing hands at $85.89.