Hello everyone. We begin with Neil’s thoughts on Netflix cutting prices in more than 100 territories. It is quite the surprising development. The discussion then turns to YouTube and where the streaming service sits in the broader video streaming industry. Will YouTube’s market positioning shift with the company moving deeper into paid video? Will YouTube run into user resistance as it looks to evolve beyond being a source of free, ad-supported content?

Let’s jump right in.

Netflix Slashes Pricing in Dozens of Countries

A long-term trend in paid video streaming has been higher pricing. We can go so far as to say price increases were the big trend in 2022 as companies prioritized revenue and profitability.

As a sign of how the streaming industry is far from settled, Netflix is trying something new in 2023. Here’s the WSJ:

“Netflix Inc. has reduced the cost of its service in more than three dozen countries in recent weeks, as it tries to appeal to customers around the world who have an ever-growing list of streaming options.

The streaming company’s recent price cuts span Middle Eastern countries including Yemen, Jordan, Libya and Iran; sub-Saharan African markets including Kenya; and European countries such as Croatia, Slovenia and Bulgaria.

In Latin America, nations including Nicaragua, Ecuador, and Venezuela have seen reductions in subscription costs, as have parts of Asia including Malaysia, Indonesia, Thailand and the Philippines.

The cuts apply to certain tiers of Netflix in those markets—in some cases halving the cost of a subscription.”

This is a surprising development. It is the opposite of what Netflix management talked about on its most recent earnings call. While management teams are not obliged to follow product strategy discussed on earnings calls, the breadth and magnitude of these price cuts strongly support the view of a strategy shift being in play.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Hello everyone. Yesterday's update regarding Google pulling the plug on Stadia led me to pursue a few additional points when it came to Google and Alphabet. Let's jump right in.

Growing Fallout Surrounding Google Stadia Shutdown

Over at TechCrunch, here’s Devin Coldewey:

“There’s a lot of chatter right now about the ‘surprise’ shutdown of Stadia, Google’s game-streaming service. While it’s true that rivals like Geforce Now and Xbox Cloud Gaming presented entrenched competition and that Google knows next to nothing about gaming, the main trouble — as with most of its products these days — is that no one trusted them to keep it alive longer than a year or two.

It really is that simple: No one trusts Google. It has exhibited such poor understanding of what people want, need and will pay for that at this point, people are wary of investing in even its more popular products…

And here’s where it was really doomed. Because while people will happily drop a couple bucks here and there for a Google service, no one is going to pay hundreds for something they have a sneaking feeling is going to be completely worthless in short order.

Google’s legacy of killing products is infamous. Its twists and turns on priorities, branding, standards and everything else have made it clear to everyone that they cannot be trusted with anything beyond their core services, and they even like to screw those up now and then.”

Coldewey concluded by saying Google has permanently destroyed the trust of stakeholders (developers / game studios / media / creators / consumers etc.) that would be needed to get new products off the ground.

Coldewey raised a number of good points. He was not alone in sharing such feelings either. Various tech publications ran similar opinion pieces regarding Google trust issues. While there is nothing wrong with killing or ending a bad product or business, if a company becomes a habitual product killer, customer trust will suffer. A very good argument can be made that Amazon is suffering from a similar dynamic especially when it comes to devices. In both cases, we have companies conducting too much R&D out in public.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Netflix Slashes Pricing in Dozens of Countries, YouTube’s Market Positioning (Daily Update)

Above Avalon Membership

Growing Fallout Surrounding Google Stadia Shutdown, Revisiting the Alphabet Structure, YouTube Testing 4K as Premium Feature (Daily Update)

Above Avalon Membership