Black Friday is around the corner. Every year after Thanksgiving, America and countries under heavy American influence see some of their busiest shopping days. Almost all companies, even OTT services like Hulu, are marketing themselves with lucrative deals. But, to new fans’ surprise, Netflix doesn’t offer any Black Friday deals.
Fall and winter are hands-down the most eventful times of the year. First, there was Halloween that commanded a grand celebration on Netflix with numerous horror releases, introducing the theme of Dr. Elvira and so much more. Gradually setting the tone for Christmas, the platform is releasing quite many holiday rom-coms, with Love Hard standing out the most.
But between these two fests lies Black Friday. For a platform that celebrates and takes part in almost everything, Netflix, surprisingly, has stayed away from this.
This is unusual news considering how OTT platforms like Hulu, Paramount, and AMC+ are offering some of their best deals during this time. In its entire history, Netflix has never participated in any holiday season deals and discounts, of which even Black Friday is no exception.
Why Netflix offers no Black Friday deals?
Netflix was initially a part of a monopolistically competitive market, which later turned into an oligopoly. This means that at first, Netflix reigned supreme over the OTT platform industry, much like DeBeers did with diamonds. Later, with the entry of streaming services like Hulu, Amazon, and Disney+ Hotstar, the market came to be reigned by a small number of companies. Each of these companies is in a cut-throat competition to become the lead service provider.
While other platforms participate in festive discounts, Netflix has never ventured into this field. This is because of the marketing strategy that allows them to retain consumers. Compared to its competitors, the subscription charges for Netflix are significantly higher. Because of this very reason, Netflix doesn’t offer any Black Friday Deals.
To understand this, let’s take the help of a little economics. The rule of thumb is that a company that charges more as compared to its competitors doesn’t usually offer discounts. This is because of three reasons:
- Lower willingness to pay. When a consumer begins paying for a service at a low price, they equate the price for the service. An increase in price would lead them to believe that the service is now overpriced, leading them to unsubscribe.
- High churn rate. After the price rises, consumers will look at other cheaper alternatives. This difference serves as the prime reason why Netflix doesn’t offer any discounts.
- Lower lifetime value (LTV). As soon as the discount period ends, most of the consumers stop their service. The resources the company used to acquire them would go to waste as there is no long-term return on investment.
What do you think of Netflix’s pricing and marketing strategy?