[비즈한국] As Netflix decided to raise the prices of its lowest-tier plans, the price gap between its ad-supported subscription (from 5,500 won to 7,000 won per month) and the Naver Plus Membership (4,900 won per month) benefit has widened from the previous 600 won to 2,100 won. For Naver Plus annual members who pay 3,900 won per month, they are now accessing the same service at nearly half the price of the Netflix ad-supported plan.
On the day following Netflix's price hike announcement (the 10th), Naver confirmed that it would maintain its affiliated membership plan prices without any changes. The reason behind this price reversal, where subscribing directly to Netflix is now more "expensive," lies in the tight-knit "Na-Net" (Naver-Netflix) alliance. Highly accessible Naver and highly experiential Netflix are leveraging each other's strengths to expand their user touchpoints. Amid observations that this pricing policy could act as a boon for Naver Plus, attention is focused on what changes it might bring to user choices.
First hike for 'ad-supported' plan, but partner service prices stay the same
Netflix raised the subscription fees for its lowest-tier "Ad-supported Standard" and "Basic" plans starting at 10:00 AM on the 9th in Korea. The Ad-supported Standard plan, which displays ads, was adjusted from 5,500 won to 7,000 won per month, and the Basic plan, which limits simultaneous streaming to one device, was adjusted from 9,500 won to 12,000 won. The Basic plan stopped accepting new subscribers in December 2023, and the move is interpreted as an attempt to encourage remaining members to switch plans.
This is the second time Netflix has raised subscription fees in Korea since it increased prices for the Standard and Premium plans in 2021. This is the first price adjustment for the Basic and Ad-supported plans, which were launched in 2016 and 2022, respectively.
Affiliated services with domestic mobile carriers and other partners will remain unchanged. Attention is focused on the Naver Plus Membership, which already allowed users to enjoy the same benefits as the Netflix Ad-supported Standard plan for 600 won less. Naver stated on the 10th, "Even if Netflix raises its rates, the partnership between Naver and Netflix is a separate contract, so it is not affected by that rate change," adding, "Affiliated benefits will also be provided as they were, without changes."
Smooth 'Na-Net Alliance': What comes next?
"While it's difficult to disclose the specific terms of the contract, the most important thing was to expand choices and increase accessibility so more users can watch Netflix." (Choi Yoon-jung, Director of Business Development at Netflix)
"We learned through our collaboration with Netflix that providing high-quality partner content as a membership benefit can maximize user satisfaction and loyalty." (Jung Han-na, Naver Membership Leader)
Naver Plus launched an affiliated membership last November that allows its members to enjoy Netflix's ad-supported subscription at no extra cost. They pushed forward with active marketing cooperation while running the "Na-Net" campaign, and even held a conference on the 28th of last month to evaluate the results of their 6-month collaboration.
Naver and Netflix have both seen a win-win effect by leveraging each other's strengths. Naver confirmed a 1.5-fold increase in new membership subscribers, and Netflix successfully secured a new user base across all ages, regions, and genders. Leader Jung Han-na stated, "Based on the high retention and engagement metrics of our members, we added Netflix content to add new value to the user experience," and added, "We also find it significant that people in their 30s and 40s, who have high digital proficiency and purchasing power, account for over 60% of new membership sign-ups."
When asked about Naver Plus holding a competitive price advantage, Director Choi Yoon-jung explained, "If it were a contract beneficial only to one side, the partnership wouldn't have been established," and noted, "We were able to observe phenomena where watching 'Culinary Class Wars' led to searching for merchandise on Naver, visiting restaurants using our map app, and other offline activities. We will continue to engage in flexible cooperation based on our consideration for connecting to daily life."
Naver and Netflix plan to continue their close collaboration centered on the common value of being "user-centric." Considering that benefits like Naver Shopping points and shipping discounts are also provided, some exodus of users who subscribe to Netflix directly is expected, making it a point to watch how the movement of users and the collaboration between the two companies will unfold.
With Netflix's subscription fee hike, Naver Plus Membership has gained a further advantage in terms of price competitiveness. The Naver Plus Membership costs 4,900 won per month or 46,800 won per year. Compared to the adjusted ad-supported price, it is 2,100 won (30%) cheaper per month for monthly subscriptions and 3,100 won (44.2%) cheaper per month for annual subscriptions.
Netflix's two changed plans were applied immediately for new members starting at 10:00 AM on the 9th, and will be applied sequentially for existing members based on their billing cycles. Netflix stated, "We have continuously invested not only in providing various global content in Korea, but also in collaborating with content and creators from all over the world that Korean viewers love," adding, "The company occasionally changes its plans to provide high-quality entertainment experiences, which leads to reinvestment for providing better value."