Netflix Cuts Prices, Other Streamers Raise Fees - What's The Plan?

Netflix price cuts that were announced last week for many global markets (100 in all) affect "more than 10 million” -- more than 4% of its 230 million subscribers.

But not for its big established markets -- such as the U.S., Canada and most of Europe.

This could be a signal -- but not exactly a trend -- from the only premium streamer out there making money.

Netflix currently has the flexibility to make changes, to perhaps put even more pressure on legacy TV-based media companies looking to catch up in the streaming space. 

Those companies still have billions in net losses from its streaming businesses -- collectively more than $10 billion a year from NBCUniversal, Warner Bros. Discovery, Paramount Global, and Walt Disney. At the same time those platforms are looking to raise prices - especially in the U.S. 



If Netflix can be stable through this period -- not moving along the same price-hike path -- it might be able to put more distance between it and the platforms that are desperate to make a big move to gain better reach and monetization.

In addition, all streamers are seeing softness in adding subscribers. Warner Bros. Discovery only saw growth of 1% -- 1.1 million -- for its HBO Max/Discovery+ duo, now at 95.6 million globally. By way of comparison Peacock, Paramount+, and others grew 10%-15% or more during the most recent period.

The bottom line is that Netflix is looking to grow -- which includes maintaining its yearly push of $17 billion or so when it comes to original content/acquired TV series activities. 

Other legacy-media company streamers are looking to trim back on production costs, halt some existing streaming shows, or remove other TV/movie content from their streaming services to sell to other competitors. This activity is particularly evident with Warner Bros. Discovery.

Near term, WBD has seen benefits -- with investors. This comes with its stock price up near 70%, as investors love WBD’s effort on reducing debt and focus on stronger cash flow.

Other not-so-subtle industry moves: Peacock recently removed its free, advertising-supported option for users -- steering business more to its subscription fee services, to focus on more revenue generation.

For the moment, Netflix is acting as if this more competitive market -- now a slow-moving streaming marketplace -- is just the ticket to separate itself with the competition.

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