The streaming platform Netflix plans to increase the price of its subscriptions, but that will not slow down the progress of the company.
Netflix It is one of the few companies that cannot complain about 2020 because it has had a fairly successful year. Since it leads the streaming service in viewings and subscriptions. Somewhat surprising, as he has to face increasingly fierce competition like Disney +, Amazon or HBO Max. However, one analyst now predicts that the platform could be preparing for a price increase in North America and Europe, but users are unlikely to suffer much pushback from the increase.
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According Alex Giaimo From Jefferies, evidence of Netflix's future plans came in the company's July second-quarter earnings call, and a change in management's language compared to the earlier message in April.
“After a change in the language regarding prices in the call (of the second quarter), we believe that a potential increase in the short to medium term is likely. In the first quarter, Netflix said they were "not even thinking about price increases," while the language of the second quarter was more open. "
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How much will prices increase?
It is unlikely that there will be an exaggerated increase in what Netflix will cost, and Alex Giaimo estimates that the price may increase in dollar each month in North America or Europe. This could easily generate between 500 million and 1 billion more a year.
Some people may wonder why Netflix would choose to adopt this strategy in a year in which it has been one of the few entertainment companies to benefit from the global situation. As they gained more than 26 million global subscribers in the first half of 2020 alone.
However, Giaimo notes that Netflix is unwilling to lose a lot of subscriptions or a lot of financial momentum as a result of increasing the cost of its offerings. Since 2010, in fact, viewers have only seen four increases in what they have to pay, and there is still a pretty strong belief that the value of a month's payment is still great.
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