Netflix streaming has been around a long time in the US, but what we forget is that it has over 60 million subscribers globally in a number of other countries. One thing you might not know about the how the company works overseas was revealed by CFO David Wells recently.
It has to do with how they determine Netflix’s subscription price in a country. One key factor they look at are the levels of piracy in that region. If it has higher levels of piracy, that means a cheaper price to access Netflix’s content.
Wells says that Netflix views illegal downloads not as some society-destroying evil, but as primary competition. That really makes sense when you think about it. Why would anyone pay for what they can get for cheaper or free.
“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,” Basically if a local population is very comfortable with pirating media, one of the only ways to make them into customers is with a cheaper price. It is interesting that they view piracy in those terms when so many others do not. It is a strategy that seems to be working for now.