![]() “They’ve reinvented the entertainment industry in the last decade.” he added. Challenges lie ahead for Netflix on subscriber growth, production costs and evolving consumer habits, Hare said. “In the near term Netflix continues to be the premier streaming service both at home and abroad,” Hare said.īeyond that? TBD. Of course, Netflix is still Netflix and continues to be massively popular with its 213.5 million users around the world. “That’s why they need to talk about the global growth story, positive cash flow, new content, new growth opportunities like gaming, and potentially new business models and markets.” “Subscriber growth in the US and Canada has been a difficult story to tell,” Hare said. If Netflix continues to bring in so-so subscriber growth numbers, Hare believes that the company will need to focus on other ways to make its investors happy. That’s why investors will be so focused on what Netflix says about the current quarter and beyond, as those higher prices start to kick in. Related article Netflix is raising prices “We’re estimating that Netflix will spend $17 billion globally and that’s off $12 billion in 2020, which happened to be a down year because of Covid,” he said. Mark Zgutowicz, a senior analyst with Rosenblatt Securities, said that Netflix spends a ton of money on content around the world, which hasn’t been supported by two of its biggest markets, US and Canada, where subscriber growth has “waned over the past several quarters.” Wall Street was happy with the news, sending Netflix’s stock up roughly 2% on Friday. In Canada, Netflix’s standard plan also went up $1.50 to $16.49 Canadian and the premium plan rose $2 to $20.99 Canadian. The premium plan increased $2 per month, to $19.99. The streaming media company said Friday that it’s raising the monthly price for a US subscription to its standard plan by $1.50, to $15.49, and its basic plan by $1 to $9.99. ![]() “Raising prices is just one lever they can continue to pull right now, though I’m not sure for how much longer,” Hare said. Related article Netflix teaming up with PGA Tour and golf's majors for 'immersive' docuseries with glittering cast of players The company’s stock surged 6.5 percent to $354.79 in Tuesday’s early afternoon trading.Alex Goodlett/CJ Cup Summit/ Ben Jared/PGA TOUR/Getty Images Investors reacted enthusiastically to Tuesday’s news, signaling their belief that the price increase won’t significantly slow Netflix’s subscriber growth. The Los Gatos, Calif., company had accumulated nearly $12 billion in debt before borrowing another $2 billion in an October bond offering.Ĭoncerns about the stiffening competition and Netflix’s ability to sustain its current leadership in video streaming have caused the company’s stock price to plummet from peak of $423.21 reached last June. To offset the negative cash flow, Netflix has been borrowing heavily to pay for programming. The company burned through about $3 billion last year and is expecting to do so again this year. That has intensified financial pressure on Netflix, which hasn’t been bringing in enough money to pay for all its programming and other business expenses. With Apple also widely expected to join the video-streaming fray, the competition for programming is enabling top directors, writers and actors to charge more for their talents. Disney is gearing up to launch a streaming channel this year. AT&T’s WarnerMedia unit plans a broader streaming service this year centered on HBO. Hulu sells an ad-free service for $12 per month. “We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement.Ĭonsumers also have an increasing array of other streaming options.Īmazon offers a streaming service as part of its Prime shipping program for $13 per month, or $120 for an annual membership. The company is now betting it can gradually raise its prices, bolstered by a string of acclaimed hits during that past five years that have included “House of Cards,” ”Orange Is The New Black,” ”Stranger Things,” ”The Crown” and, most recently, the film “Bird Box.” Netflix lost 600,000 subscribers - about 2 percent of its total customers at the time - after that switch. For instance, Netflix faced a huge backlash in 2011 when it unbundled video streaming from its older DVD-by-mail service, resulting in a 60 percent price increase for subscribers who wanted to keep both plans. ![]() ![]() Higher prices could alienate subscribers and possibly even trigger a wave of cancelations. Netflix had nearly 79 million subscribers outside the U.S. ![]()
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