Because it is raising rates, Netflix will lose 480,000 subscribers over the next few months! Shock!
But because of the same rate hits, its revenue will rise by $520 million, according to new research by Nomura Securities.
I suppose it's prudent for financial analysts to present stats like that. I’d bet that subscription drain will never come close to 480,000.
Other research lately has suggested viewers would pay a lot more for stuff they want to watch online. At the OTT Video Executive Summit last week, consumer panelists indicated they’d pay $2 to $15 more per episode for streaming video they want to see. That’s anecdotal, and crazy, but some bit of it is true when it comes to Netflix, which is absolutely beloved by its subscribers.
They’re not going anywhere because their monthly subscription is going up a buck or two.
In a report for BRaVe Ventures, I wrote about last week, Alan Wolk opined: “Given the wide array of TV shows and movies Netflix has available, we think the subscription price can go up to $20/month, and it will still seem like quite the bargain.”
Starting soon, about 22 million Netflix subscribers in the U.S. who are longtime subscribers and were grandfathered from rate hikes others paid, will begin seeing their bills go up. And that, Nomura says, will lead to the 480,000 defections.
That’s a piddling amount, really, but I’d bet it’s still less than will really happen.
Netflix delivers value to subscribers and fawning press lets its subscribers know it. In the first quarter, Netflix said it has $12.3 billion in programming obligations, which is 73% ahead of two years ago.
The stream of new shows, and the stream of performers and producers singing Netflix’s glories, keeps the customers satisfied.
“Netflix gets better with every passing month, something that can't be said of most cable or satellite television platforms that push out bigger annual increases on a dollar basis,” Motley Fool says in an article titled “You’re Not Quitting Over The Price Hike, So Get Over It.”
That is one of the neat perceptive tricks about streaming in its baby years. Paying $10 or $11 a month for streaming services, even when multiplied by three or four services, seems like chicken feed compared to the cable rates, which rise mysteriously and often.Cable rates have gone up 8% a year since 2010, says one study from the Leichtman Research Group. Meantime, Netflix basks in this video era of good feeling. Even as Netflix subscription growth slows, its lock on the market is absolute.