Freeflix in Kenya 🎥
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Freeflix in Kenya
Netflix has been seeing some massive growth over the last couple of years spreading within the international markets especially within Africa. Over the past couple of years, it has managed to acquire about 2.6 million subscribers in Africa.Â
This week it announced the launch of a new plan in Kenya
What plan?
A free tier. Netflix for the first time ever just launched a free plan for users across Kenya. It plans to tap close to 20 million users within the East African nation.Â
The new plan will be available to users under the age of 18 and will also not need a user to sign or input some form of payment information. It will also not include ads.
Tactics used so far
While Netflix is currently available in over 190 countries, it has experimented with several strategies to get more such as the $3 mobile-only plan it launched in India in 2018. It also launched a free trial in the same country some time ago allowing viewers to view a portion of its movies and shows for a weekend.
Is it coming to all of us?
Netflix has not stated whether it plans to offer this service to other countries within Africa or other developing markets. But the company studies each continent to find ways that make its services of more value to these customers. What’s next? Who knows?
What’s nextÂ
Netflix claims it plans to add video games to its offering; it fell below its targets this quarter as it only managed 1.5 million net paying subscribers. Currently, the streaming giant has about 209 million subscribers and competes with Amazon Prime Video, Disney+ when it comes to acquiring new customers within developing regions.Â
China’s Evergrande episode explained
China’s regulatory crackdown has put its real estate industry in the spotlight.Â
What’s happening?
The Chinese government has been putting all sorts of regulations in place to make it easier for homebuyers to get on the property ladder, as well as to reduce the amount of debt in the sector. But it’s also caused a setback for many real estate developers, especially real estate giant Evergrande, whose $300 billion-plus in debt makes it the most indebted property company in the world.
What is Evergrande?
Evergrande, founded in Guangzhou in 1996, is one of the largest real estate developers in China. It owns more than 1,300 projects (780 under construction) in about 300 Chinese cities and has interests in other businesses including sports, media and electric mobility.
On its debt problems, it has about $129 million in interest that’s due for payment immediately and $850 million of principal repayments are due in the next three months. But it’s struggling to pay back.
How did it get into this mess?
It’s all tied to the business model followed by developers like Evergrande. They bid for land at very high prices, which are then passed on to homebuyers in the form of inflated property prices. The result of this is that bankers can lend more to homebuyers due to the higher value of the property which serves as collateral. This led to a significant increase in household debt and unaffordable prices.
The effect on China is that household savings were diverted to an inflated housing sector rather than to the capital-starved high technology sector which had to increasingly rely on foreign capital. It also frustrated efforts to make domestic consumption – and not exports – drive China’s economy.
To correct these issues, the Chinese authorities took measures, including curbs on venture capital investment in real estate. The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat. Now, it is struggling to meet the interest payments on its debts.
Why it matters: Property-related activities are estimated to make up 29% of the Chinese economy, so any distress in that space will have a ripple effect on the Chinese economy.Â
A mishap to the Chinese economy is the world’s factory. It makes 70% of the world’s air conditioners, 58% of shoes and the largest printer of bibles. If China slows down, businesses around the world will slow down.
Now that we’re here, all eyes are on whether Evergrande will receive a bailout from the Chinese government to help it pay its loan or it’ll be left to crash. The former is the more expected scenario.
Worth reading 📚
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Quote ðŸ’
We think we understand the rules when we become adults, but what we really experience is a narrowing of the imagination.
– David Lynch
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