Are you an ardent follower of web series and online streaming channels? Then here is an important news for you!
There is some buzz making rounds in business circles about your favorite Netflix!
The streaming video giant, which was on high profits early July 2019, has suddenly taken the down trajectory towards negative zone.
Yes, you heart it right! Increased competition in the video streaming industry and an unexpected subscriber loss have reportedly hit Netflix’s 46% gains earned earlier in this year.
The company has come across some disappointing events over the last few months.
Some of them being NBC pulling-off the popular show ‘The Office’, sudden loss of US subscribers and missing out international subscriber ads in the second quarter have badly impacted Netflix’s stocks, resulting in a longest decline that the company hasn’t seen in the last five years.
Moreover, launch of their own streaming services by prominent players such as Apple, Disney and NBC, among others came as a big blow to Netflix’s stocks.
According to Barclays business analyst Kannan Venkateshwar, Netflix will need millions more subscribers than it can get to recover. Because of this reason, it’s very expensive for growth companies under the new valuation framework.
Reports say Netflix has already increased its pricing in January from 13% to 18%, which got it gains. But the same might not be willing for investors in the current situation.
Increasing competition can “take away engagement, make content more expensive or diminish the price power Netflix has exhibited for several years,” says another analyst.
While Netflix basic pricing in US starts at USD 8.99/month, the newcomers are charging USD 4-9 per month, thus gaining a competitive edge.
Is it the time for Netflix to rethink on its pricing strategy?