The Impact of Netflix Increasing its Prices

 

ARTICLE : https://www.marketwatch.com/story/netflix-earnings-analysts-await-update-on-how-price-increases-are-affecting-growth-2018-01-17

Netflix is going to report its fourth quarter earnings next week and the question addressed in this article is : How has their increase in pricing affected its earnings?

This article states that Netflix is expected to have : “more than 173% improvement compared with the same quarter a year ago, and roughly a 41% increase compared with the third quarter”. If this is true  and Netflix ends up making more money, I think this is a clear reflection of Netflix’s dominance in the streaming industry and the weight its original content has since it has reduced a lot of its outside content  (which has been of annoyance to many subscribers -myself included). Although, including greater original content is a crucial move by Netflix since Disney is planning to collaborate with Fox for their own streaming service in 2019 and as a result Netflix will not be able to attain rights to programs/films from Marvel, Pixar etc.

Cosmopolitan magazine even addressed many negative comments from subscribers when the announcement for price increase was heard:  http://www.cosmopolitan.com/entertainment/tv/a13607214/netflix-raising-prices-social-media-reactions. However, I believe Netflix’s earnings will result in the prediction laid out in the article despite complaints by subscribers. Although, I wasn’t actually bothered by the price increase because I found it to be incremental ( as Netflix strategized to do) , after our discussion about the oligopoly of companies in mainstream media and telecommunications – I can’t help but think in the years to come I will start caring as we may be going down the same path with streaming sites – where consumers get squeezed financially due to the dominance of a few companies.

On the other hand it would be interesting to know how Hulu is doing as it dropped its prices and increased its outside content at the same time Netflix increased its prices. http://www.newsweek.com/hulu-price-drop-netflix-681029