Netflix has enjoyed a pretty successful year, from its leadership on the streaming charts to the sheer amount of money that the service continues to rake in. However, an analyst is now predicting that the platform could be preparing to raise its prices in North America and Europe, but is unlikely to experience much pushback from its users over the move.
According to Alex Giaimo of Jefferies, the evidence for Netflix’s future plans came in the company’s July second quarter earnings call, and a shift in language from management compared to the previous message in April. Giaimo had this to say on the subject:
“After a change in language regarding pricing on the (second-quarter) call, we believe a potential hike is probable in the near to midterm. In Q1, Netflix said that they were ‘not even thinking about price increases,’ while the Q2 language was more open-ended.”
It’s unlikely that there’ll be a radical restructuring of what we’ll have to pay for Netflix, with Giaimo estimating perhaps a dollar or so more a month increase for those in North America or Europe could generate an easy extra $500 million to $1 billion for the streaming site. Also, it’s more likely that these price changes will happen in the EMEA (Europe, Middle-East and Africa) markets, at least based on the current analysis.
There may be some people wondering why Netflix would choose to adopt this strategy in a year where they’ve been one of the few entertainment companies to benefit from COVID-19 lockdowns, adding 26 million or so global subscribers in the first half of 2020 alone. Furthermore, Netflix arguably still have the edge over their main rivals in terms of the overall depth and quality of their original content, even if there has been some caution over the budgets for pictures and series like The Irishman and Altered Carbon.
Giaimo notes, though, that the streaming site doesn’t stand to lose many subscriptions or much financial momentum as a result of boosting the cost of their offerings. Since 2010, in fact, viewers have only seen four increases in what they have to pay, and there’s still a strong case that the value of a month’s payment remains excellent.
Would you be ok to see your Netflix bill go up a bit, though? As ever, let us know in the comments section down below.
