What is one of Netflix\u2019s key advantages? It offers no discounts. Netflix has never offered the ability to sign up for a year and pay a lower price. It has also never provided special pricing around the holidays or at any other time during the year, nor offered discounts to students or members of the military. Along with price increases, Netflix\u2019s pricing strategy is a key factor in its ARPU\u2019s significant rise over the years, while other SVOD platforms have struggled to increase their ARPU, thereby impacting their profitability.<\/p>\n With Disney, Paramount, Peacock, and WBD routinely offering pricing discounts of up to 50% or more, they lose money from every subscriber who signs up with special pricing. Their long-term strategy is a gamble that they can retain the customer once the discount expires and generate revenue from the subscriber over multiple years. This strategy doesn\u2019t always work, and Netflix never has to take that gamble.<\/p>\n In Q4 of 2020, Netflix\u2019s ARPU in NA and Canada was $13.84. At the end of Q4 of 2024, Netflix reported an ARPU of $17.26, with price increases in 2022 and 2023. For comparison, Disney\u2019s ARPU for Disney+ domestic in Q4 2022 was $6.10, and by Q4 2024, Disney+ ARPU had risen to only $7.70, with three price increases in 2022, 2023 and 2024. Disney\u2019s price increases were higher than Netflix\u2019s, and more often, and yet they still haven\u2019t seen the ARPU growth that Netflix achieved.<\/p>\n It is also worth noting that in 2022, Netflix introduced its new AVOD plan for $6.99. Within two years, more than half of new Netflix subscribers signed up for the plan in countries where it is available, according to Netflix. And yet, Netflix\u2019s APRU still grew, even with an unknown number of consumers, like myself, downgrading from a $19.99 plan to the $6.99 plan. While Netflix faced significant criticism from analysts and the media in its early years of streaming, with many suggesting that the company was missing out on signing up more subscribers due to a lack of discounting, Netflix\u2019s pricing strategy was correct all along.<\/p>\n One could argue that Netflix\u2019s \u201cdiscount\u201d strategy was allowing users to share their account, thereby building a base of users that could be converted to paid users over time. As we\u2019ve seen from Netflix\u2019s numbers, this strategy has been successful. And while Netflix doesn\u2019t offer a monthly discount, users can pause their account for a maximum of three months, with the option to extend the pause one month at a time before it ends. For those who take advantage of pausing their account, that\u2019s essentially a discount; however, we have no data from Netflix to indicate what percentage of users have ever utilized this feature.<\/p>\n As we\u2019ve heard from Disney during their earnings calls, Disney\u2019s ARPU growth has also been negatively impacted due to \u201cwholesale\u201d deals, where they receive lower payments per subscriber from carriers that offer free Disney+ accounts with home internet and wireless services. As Disney recently highlighted in an SEC filing, \u201cWholesale arrangements have a lower average monthly revenue per paid subscriber than subscribers that we acquire directly or through third-party platforms.\u201d While Netflix also has some wholesale deals with Verizon, T-Mobile, Xfinity (Comcast), and Dish, insiders at these companies tell me that Netflix doesn\u2019t offer the same level of discount on its wholesale pricing as Disney, or in some cases, doesn\u2019t offer any discount at all. Netflix knows its service is the premium brand and the most essential OTT service in any carrier bundle.<\/p>\n Netflix is very selective about who it partners with on wholesale deals. In contrast, Disney was offering wholesale deals to anyone who wanted them, including TV and streaming device manufacturers, Walmart+, wireless carriers, ISPs, and even Salesforce, which gave away a free 12-month subscription to Disney+ just for streaming one session from their Dreamforce event in 2021. Disney has also given away, or offered highly discounted Disney+ subscriptions to Disney fan club members, including a 3-year lock-in price of $3.92 per month, when the service launched in 2019.<\/p>\n We\u2019ve also seen similar discounts with Peacock\u2019s streaming service. In the lead-up to the 2024 Olympics, Peacock offered a special one-year deal priced at $19.99, representing a 66% discount from the list price. Comcast\u2019s goal was to utilize the Olympics to expand the subscriber base for Peacock, with the hope that new subscribers would remain on the platform after one year and then pay the full price. The company gained 3 million net new subs in Q3 of 2024, but then saw no net new subs in Q4. With the special one-year deal expiring last quarter, it will be interesting to see the number of Peacock subscribers Comcast reports in its earnings on October 30th and whether Comcast will discuss how many discounted subscribers who signed up just before the Olympics are still active customers.<\/p>\n As consumers, we all like discounts. However, they would not have helped Netflix\u2019s balance sheet, and the company knew it. Netflix has always played the long game with its business, and its pricing strategy has been executed perfectly to date. Here\u2019s a list of APRU numbers from all the streaming services that disclose them<\/a>.<\/p>\n![\"\"](\"https:\/\/www.streamingmediablog.com\/wp-content\/uploads\/2025\/10\/netflix-logo-3.jpg\"){kind=logo}
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