The monthly price for a Netflix subscription might be going up. The streaming service is likely to be upping its cost for users but not by very much. The year has been a big one for the platform as movie theaters have shuddered and many have turned to Netflix for new content which they can watch safely from their own homes. As Netflix continues to spend big money on productions with some of the biggest names in film, the product will be slightly more expensive to support those big expenditures. Originally, Netflix seemed to have no interest in upping its price but now its tune is changing.
"After a change in language regarding pricing on the (second-quarter) call, we believe a potential hike is probable in the near to midterm," Alex Giaimo, a Wall Street analyst, wrote in a note to clients obtained by Deadliine. "In Q1, Netflix said that they were 'not even thinking about price increases,' while the Q2 language was more open-ended."
If the subscription price were to increase by merely $1 or $2 per month across North America or Europe, this could produce a $500 million to $1 billion increase in revenue for fiscal 2021. The "most likely" areas to be hit with a slight increase in price, according to Giaimo, are Europe, Middle East, and Africa. This is expected to add "$700 million to 2021 revenue." Giaimo does expect the price of Netflix shares to increase less than before as 2020's successful year for the streaming service may have pumped up the numbers to a slightly exaggerated extent. Currently, Netflx shares are valued at $479.
This possible increase in price comes as the streaming wars continue to heat up. Disney+, HBO Max, Hulu, Peacock, CBS All Access, and others continue to try to carve out their share of the streaming service subscriptions which Netflix lead the charge on when it switched from a service by mail to a digitally streaming product.
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