By Jonathan Easton
A price increase at Netflix is ‘probable’ but unlikely to turn off many subscribers, claims an analyst.
According to Jefferies’s Alex Giamo, a “change in language regarding pricing” between the streamer’s Q1 and Q2 earnings calls has left the analyst believing that “a potential hike is probable in the near to midterm.”
Netflix had told investors in Q1 that it was not considering a price increase, but did not write it off in Q2 following a quarter in which it added 10 million subscribers.
Giaimo wrote that increasing prices by US$1-2 per month could generate US$500 million to US$1 billion in additional subscription revenue for 2021. He said that an increase in EMEA is “most likely”.
He noted that the company’s momentum would sustain it through any subscribers who may switch off as a result of the price hike.
The analyst also boosted his 12-month price target on Netflix shares from US$550 to US$570. https://www.digitaltveurope.com
