Scalper1 News
Netflix ( NFLX ) will be putting its pricing power to the test next month as many long-time U.S. subscribers get hit with a price increase. Morgan Stanley analyst Benjamin Swinburne says the price hike will have little impact on Netflix’s U.S. subscriber churn rate. Netflix stock was down a fraction, below 105, in afternoon trading on the stock market today . “Our survey work is clear: Original programming drives member satisfaction, which we believe drives down churn and creates pricing power,” Swinburne said in a research report Thursday. Morgan Stanley’s most recent streaming video survey found that Netflix’s original programming strategy is gaining traction. About 45% of Netflix users surveyed cited original shows as a reason to subscribe and nearly 30% of all survey respondents stated Netflix offers the best original programming among subscription video-on-demand and premium TV networks — both healthy increases year-over-year, Swinburne said. Cowen analyst John Blackledge on Tuesday said he, too, believes original programming will help Netflix weather the upcoming price increase . Baird analyst William Power is more cautious. “While planned price increases should benefit overall revenue and help cover growing content costs, the potential churn impact has been a central question for many investors,” Power said in a report Thursday. Power rates Netflix stock as neutral with a price target of 115. Still, Power says the price increase will not have a big impact on subscriber numbers, citing Netflix’s compelling value proposition. Morgan Stanley estimates that 45% to 50% of Netflix paid domestic subscribers at the end of the first quarter still pay the grandfathered price of $7.99 a month. They’ll see an increase to the current price of $9.99 a month. Scalper1 News
Scalper1 News