Netflix warns price rises to hit subscriber growth

Apr 18, 2019, 00:31
Netflix warns price rises to hit subscriber growth

This becomes more important as media giants Apple and Disney set to launch their subscription services, which are centered around original content.

Shares of Netflix traded down about 1 per cent at US$355.02 after-the-bell, paring losses following a deeper sell-off just after the results were released.

Netflix says it doesn't expect the price increase to trigger significant cancellations, thought its second-quarter forecast implies otherwise.

Netflix still licenses shows like "Grey's Anatomy" from other studios and has also ramped up investments in its own programming to produce series like "Stranger Things". "This is made all the more prominent by the looming threat of competition from Disney and Apple".

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That does not mean that I, and probably millions of others, won't eventually fork over money for Apple's new streaming service - the talent that Apple has recruited for its projects is a major draw, after all - it just means Apple can't just keep throwing money at talent and expecting viewers to jump on board based on promises alone. Revenue went up 22% to $4.52 billion. "Consumers associate Netflix with streaming". All this content will certainly make Disney+ a more attractive service and Disney CEO Bob Iger admits that the content was the reason Disney bought Fox.

Netflix said it is "excited to compete" with its new rivals, adding: "We don't anticipate that these new entrants will materially affect our growth".

Netflix spent US$7.5-billion on TV shows and movies for 2018, and executives have said that amount will grow in 2019.

More than a quarter of Netflix open interest is due to expire in the wake of Tuesday afternoon's first-quarter release, with bullish calls outweighing bearish puts.

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Netflix confirmed it is testing higher prices for its plans last month with the people seeing prices of £10.99, £11.99 and £12.99 for the monthly subscription. "We believe well all continue to grow as we each invest more in content and improve our service and as consumers continue to migrate away from linear viewing (similar to how United States cable networks collectively grew for years as viewing shifted from broadcast networks during the 1980s and 1990s)", said Netflix.

Disney said it would include all 30 seasons of "The Simpsons", family-friendly titles like "The Sound of Music,"and "Malcolm in the Middle" and its forthcoming "space opera " series "The Mandalorian". Hulu, which is controlled by Disney, Comcast, and AT&T, had 25 million USA subscribers in 2018.

Analyst Neil Macker at Morningstar said Disney "came out swinging at its investor day with an aggressive price point" for its streaming service.

Last month, Netflix's VP for content Bela Bajaria began to lead the platform's worldwide non-English TV originals. "We're quite bullish on that and we'll see how it does", he said.

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