Some Netflix Subscribers Say They'll Leave Over New Pricing

Jan 20, 2019, 02:26
Some Netflix Subscribers Say They'll Leave Over New Pricing

Netflix said in a statement that with movies like Roma, from Mexican director Alfonso Cuaron, "we are beginning to have our original movie offering mirror the success of our series".

Netflix, which raised prices for most USA subscribers by $1 to $2 a month earlier this week, said net income fell to $133.9 million, or 30 cents a share, from $185.5 million, or 41 cents, a year earlier. This quarter, the company is predicting profit of 56 cents, short of the 85-cent average Wall Street forecast.

Netflix is raising its US prices by 13 percent to 18 percent, its biggest increase since the company launched its streaming service 12 years ago.

Management guided first-quarter paid net adds to be 8.9 million, which came in 6 percent ahead of what the Street had already modeled, Schindler said in a research note.

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The massive audience range still doesn't paint a definitive picture of how many people are watching Netflix's content, though, as the numbers rely on subscriber households and not the actual number of viewers.

A Disney streaming service might grow to account for tens of millions of hours of United States television viewing over the course of several years, but that is out of a dizzying amount of total time spent watching, Hastings said during an earnings presentation. Revenue at the company was up 27.4 percent from the year-ago period to $4.2 billion. Netflix's estimate comes from overall US television screen time of about 1 billion hours daily - 120 million homes, times two TV sets, times four hours a day, which include out-of-home screens, such as hotels and bars.

In the fourth quarter, the streaming platform added 1.53 million domestic subscribers and 7.31 million global subscribers, both topping Wall Street estimates.

"Investors were hoping for a robust outlook after the video streaming pioneer, which boasts of popular shows such as "The Crown" and Black Mirror", raised prices for most us subscribers earlier this week.

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This marks the fourth price increase that Netflix has rolled out in the US. After market trading, Netflix stock was down around 3% to 4% to $343.01. The company also said that "You", a new thriller TV series, was watched by more than 40 million members in its first four weeks. According to The Globe And Mail, the footage has turned up both in Netflix's Bird Box and their sci-fi show, Travelers.

The company said it expects free cash flow in 2019 to be similar to 2018, but sees improvement each year thereafter.

That's because worldwide growth will be a key driver for Netflix's continued dominance of the streaming video industry in the future.

One of those analysts told Business Insider he would reconsider his rating and price target if Netflix were to aggressively reverse its cash burn.

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