According to a report by Cowen, Netflix is expected to increase its prices as the demand for its original shows increases.Netflix Inc. offers online video content services to its 75 million streaming subscribers in 190 countries globally. The company has become a true and the uncrowned leader of the TV industry. It has over three streaming plans that vary from each other. Irrespective of the price, the overall deal is not bad, considering the entertainment library it provides to the customers. global TV network
One of the main reasons for the company to plan global expansion was slow user growth in the domestic market. Netflix closed the year 2015 with 74.76 million subscribers out of which nearly 45 million subscribers were from the United States.
If rumors are to be believed, the streaming giant is all set to hike its monthly prices once again. Many analysts believe that this might not be good for the company after all no one likes an increase in price for what they are currently paying. The investment bank ‘Cowen’ said a couple of days ago that the US streaming business can easily cope up with an upcoming price increase which might cost it valuable customers as well.
According to Cowen, the price hike is due to the increasingly popular original TV shows on the platform. Netflix is producing back-to-back hit shows, which have certainly gained the attention of the customers. Cowen added that nearly 16 million streaming subscribers in the United States, which is accountable to 36% of the total US customer base, would see an increase in price of their standard plan by $2. The standard plan will cost $9.99 per month starting May.
The streaming service provider previously enacted two price hikes of which one was validated in May 2014. The company decided to give a grace period to its existing customers.
An analyst at Cowen, John Blackledge, believes that the US customer base would see a slight increase in the second quarter. The recent survey conducted by Cowen showed that the growth would not be massive. It expects Netflix to add 630,000 new US subscribers, which are 30% down from what it added a year ago.
There are speculations that Netflix might lose its customers amidst price hike, but the report by Cowen showed that the support would be stronger than ever, irrespective of the prices.
The investment bank conducted a survey, which had 2,500 US participants. Among those, 49% of the participants were paying for the services, 29% have not subscribed to Netflix ever, 11% stopped using the streaming platform, 9% were using it on password and account sharing basis, and 2% of the people were on a free trial.
According to the study, almost 58% now buy the monthly subscription for the original shows. Michael Pachter, analyst from Wedbush, said that more than 30 million customers would face the price hike this year.
Pachter also rates the company stocks as underperform. He believes that the company wants to minimize the influence of price hike by launching new shows at the right time.
One of the main reasons for the company to plan global expansion was slow user growth in the domestic market. Netflix closed the year 2015 with 74.76 million subscribers out of which nearly 45 million subscribers were from the United States.
If rumors are to be believed, the streaming giant is all set to hike its monthly prices once again. Many analysts believe that this might not be good for the company after all no one likes an increase in price for what they are currently paying. The investment bank ‘Cowen’ said a couple of days ago that the US streaming business can easily cope up with an upcoming price increase which might cost it valuable customers as well.
According to Cowen, the price hike is due to the increasingly popular original TV shows on the platform. Netflix is producing back-to-back hit shows, which have certainly gained the attention of the customers. Cowen added that nearly 16 million streaming subscribers in the United States, which is accountable to 36% of the total US customer base, would see an increase in price of their standard plan by $2. The standard plan will cost $9.99 per month starting May.
The streaming service provider previously enacted two price hikes of which one was validated in May 2014. The company decided to give a grace period to its existing customers.
An analyst at Cowen, John Blackledge, believes that the US customer base would see a slight increase in the second quarter. The recent survey conducted by Cowen showed that the growth would not be massive. It expects Netflix to add 630,000 new US subscribers, which are 30% down from what it added a year ago.
There are speculations that Netflix might lose its customers amidst price hike, but the report by Cowen showed that the support would be stronger than ever, irrespective of the prices.
The investment bank conducted a survey, which had 2,500 US participants. Among those, 49% of the participants were paying for the services, 29% have not subscribed to Netflix ever, 11% stopped using the streaming platform, 9% were using it on password and account sharing basis, and 2% of the people were on a free trial.
According to the study, almost 58% now buy the monthly subscription for the original shows. Michael Pachter, analyst from Wedbush, said that more than 30 million customers would face the price hike this year.
Pachter also rates the company stocks as underperform. He believes that the company wants to minimize the influence of price hike by launching new shows at the right time.