OPINION: Netflix wants more money, but is the streaming industry getting too cocky?
Netflix Inc. once represented the cutting edge of media, from its early days of sending DVDs by mail to its eventual transformation into a utopia of low-cost, high-quality, ad-free entertainment. Ta.
Now, the company appears to be taking a step back. The company promised to continue offering affordable prices as it looks to siphon more money from consumers with new price hikes announced Wednesday. Netflix
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The ad-supported tier of the service, which launched about a year ago, will continue to cost $6.99 per month, a price the company says is “very competitive with other streamers” and better than the average price of a movie ticket. It is said that there is.
read: Netflix’s stock price soars more than 10% due to huge jump in subscriber numbers and price hike
Netflix seems to think its rivals’ advertising is all wrong. In a video interview after the company’s third-quarter earnings report on Wednesday, Netflix co-chief executive officer Greg Peters said that to some extent, some streaming peers “maybe not doing as great of a job at building ad experiences.” No,” he said. “Part of that is educating consumers about what their actual Netflix ad experience is like and getting them thinking about what’s the right choice for them.”
But any kind of advertising environment is not what streaming customers expect. Cord cutters once sought to save money by avoiding bundles of expensive cables, but in the process, they were able to get a better viewing experience by being able to watch shows on demand without interruption. Ta.
In theory, Netflix subscribers could switch to an ad-supported option if they are upset by price hikes on the company’s basic and premium services, but they may not want to go back to watching entertainment the old way. difficult.I have tried to watch Disney ad-supported programs several times.
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-Hulu, managed by Alphabet Inc.
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YouTube and Amazon.com Inc.
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I stopped watching FreeVee because the commercials were so frequent and annoying.
Streaming services are now hoping they can hold long-term subscribers hostage. For example, their children may have little recollection of watching the types of programs that have advertisements. Meanwhile, there are setbacks for both companies, and budget-conscious consumers will suffer from advertising as they take advantage of Netflix and its peers’ growing revenue streams. Otherwise, you’ll have to give up watching streaming services altogether.
In a letter to shareholders, Netflix said its programming costs would rise from $13 billion in 2023 to about $17 billion next year, assuming the Hollywood actors’ strike is resolved. Therefore, Netflix needs to earn more revenue from its customers to cover its ever-increasing costs in a competitive market.
But consumers can walk away at any time. It might actually happen. If the cost of streaming becomes too ridiculous, we’ll see more people leaving these services. This is not what consumers signed up for, but if too many people drop or cancel some of the services, prices could still rise to make up for lost customers.
Netflix isn’t the only streamer chasing dollar signs through pricing moves.Earlier this month, the Walt Disney Company
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has increased prices for ad-free slots on Disney+ and Hulu as it removes some content. Amazon also plans to raise prices for ad-free Prime Video starting next year, meaning consumers will have to pay an additional $2.99 a month to avoid commercials.
read more: Pricing for the streaming service is as follows
Netflix’s stock soared more than 12% in after-hours trading after Wednesday’s earnings release, as Wall Street cited the company’s recent subscriber growth (adding 8.76 million in the third quarter, beating expectations). That suggests they like the company’s strategic direction in pricing. Sure, investors want increased returns. But they also hate churn. If they overreach, Netflix and other companies may do the same in the future.
With so many streamers raising prices in an uncertain economic environment, the industry may be being too cocky about its ability to retain customers.
