Analyst Note| Neil Macker |
Netflix dropped prices in over 100 countries and territories effective Feb. 23 according to Ampere Analysis. The magnitude of the price drop differed by both market and plan with the basic plan receiving the largest decreases, from 20% to almost 60%. The affected areas are spread across the world and are largely emerging markets. However, Netflix did not make changes to some of the largest emerging markets such as India, Brazil, and Mexico. We are maintaining our $315 fair value estimate as we have long assumed that Netflix would need to lower pricing outside of the U.S. and Western Europe to remain competitive.