Response Magazine Site Response Expo Site Direct Response Market Alliance Site Job Board

 

   Log in
  



Direct Response Marketing

Netflix’s Stock and Price Rise

11 Oct, 2017 By: Doug McPherson


LOS GATOS, Calif. – Netflix’s stock and prices are on the rise. After posting a respectable 5.4-percent gain in its stock price last week, it announced it would be raising its average monthly consumer prices by 8 percent, according to FBR & Co, to $10.16 per month for users when looking at all its streaming consumer packages.

Starting in November, the price for Netflix’s premium plan, which includes four concurrent streams and ultra HD, will rise by $2 to $13.99 per month. Netflix’s standard plan, which includes two concurrent streams and HD, will climb $1 per month to $10.99. The basic plan, with one stream in standard definition, will stay at $7.99 per month.

Barton Crockett, media analyst at FBR & Co., told MediaPost News he’s encouraged by the news, and that the hike "seems to be a lower key announcement than former ones, so it might draw less consumer attention, which would be a good thing."

“We don't think Netflix would be raising rates if it was uncomfortable with current [subscriber] trends, or with the competitive fallout of media conglomerates," he says, pointing to Disney's decision to pull content. He added Netflix is looking to "compete more directly in subscription video-on-demand (SVOD) platforms.”          

Analysts say the increases are probably necessary as Netflix spends more and more on content – close to $7 billion next year, according to its content boss, Ted Sarandos.

Still, despite the price increase, Netflix will remain less expensive than cable in terms of viewing time.

UBS analysts found that an average pay-TV package cost more than three times as much per hour of viewing as Netflix. The per-hour cost of traditional packages was about $0.42, while that of Netflix was about $0.10. That lead is not likely to be hurt too much by a $1 or $2 price increase.

When Netflix raised prices by more than 60 percent and separated its mail DVD business from its nascent streaming TV business in 2011, consumers complained – with roughly 800,000 customers dropping the service. Its stock price dropped 60 percent in the third quarter of that year.

In October 2015, Netflix raised its prices for new members and then "un-grandfathered" existing customers into new prices. Those moves earned backlash from the public and it missed subscriber growth targets in 2016.


Add Comment



©2017 Questex, LLC. All rights reserved. Reproduction in whole or in part is prohibited. Please send any technical comments or questions to our webmaster. Contact Us | Terms of Use | Privacy Policy | Security Seals