Is There A Price Increase On The Horizon From Netflix, Inc. (NASDAQ:NFLX)?


Netflix, Inc. (NASDAQ:NFLX)’s top executives are pitching for original content. CEO Reed Hastings opined that original shows are those that foment desire and loyalty in Netflix subscribers and not licensed content. Originals get folk addicted so much so that they would be ready to pay some more money per month. Hastings declined to predict Netflix future pricing opining that it was linked to value.

Ted Sarandos, Netflix chief of content opined that originals were a stable investment as they deliver full exclusivity and perpetual global rights. The latter is invaluable as Netflix looks to expand internationally.

The more there is great value, the more there will be great originals. This results in being able to demand more money from consumers. Research supports this conclusion. Netflix currently increased the price of its most selling subscription plan in America from $8.99 to $9.99.
The company plans to spend $ 5 billion in 2016. Hastings recently mentioned that Netflix has in hand only $2 billion although it’s trying to raise capital.

Netflix maybe featuring news documentary soon, Its head of content Mr. Sarandos said that the organization was looking at documentaries to attempt new ideas and drawing younger audiences.

Netflix attributes its lackluster US subscription growth due to transition to chip credit cards. The company released its third-quarter earnings on Wednesday. It’s clear that new subscribers figure is disappointing. The company had predicted additional 1.15 million domestic subscribers. But in reality only 880,000 were added.

The company gave the reason for failure as the recent move to chip-based debit and credit cards in the country. However, it looks like a lame excuse. The move to more secure chip cards had been under operations for a long time. Europe used such cards for more than a decade now.

In the switch to the new cards, fraud liability was transferred to merchants. Earlier the issuing bank took responsibility for the fraud.

As per Netflix, as some customers’ card data was altered when they obtained new cards it affected Netflix renewals. However, when folk get their new chip-card the account number on the card’s face does not change. What changes is the security code and expiration date.

Sources: theverge, fortune, businessinsider