If you’re at all like me your bank account has taken a hit since the start of the COVID-19 pandemic. Money seems to be in shorter supply these days on account of lost job hours, homeschooling expenses, or some well-deserved retail therapy. It’s okay, I feel your pain. Unfortunately, a recent report from Wall Street analyst Alex Giaimo of Jefferies suggests that the wallet vampires over at Netflix could be growing restless and are looking to raise subscription prices in Europe and North America.
According to Giaimo, Netflix has changed its tune between the streamer’s Q1 earnings call and its second in July.
“After a change in language regarding pricing on the (second-quarter) call, we believe a potential hike is probable in the near to midterm,” Giaimo wrote in a note to clients. “In Q1, Netflix said that they were ‘not even thinking about price increases,’ while the Q2 language was more open-ended.” (via Deadline)
If Netflix were to raise prices for its service by $1 to $2 a month, this could generate $500 million to $1 billion in fiscal 2021 revenue, in areas like Europe and North America. Soon, Netflix will share its Q3 earnings during a call on October 20. The streamer has performed well during the COVID-19 pandemic thanks to a number of new and existing subscribers sheltering in place and taking advantage of the service. In fact, Netflix added roughly 26 million global subscribers in the first half of the year for a grand total of 193 million audience members. As impressive as that is, Netflix now has some stiff competition with services like HBO Max, Disney+, and Apple TV+continuing to make sizable waves.
While price hikes aren’t a new concept for Netflix, boosting their subscription fees during a pandemic could cause subscribers to jump ship. There’s only so much money to go around, and like I was saying earlier, competition is fierce. As someone who subscribes to Netflix, Disney+, Amazon Prime, Playstation Plus, and soon, Xbox Game Pass Ultimate, that $1 to $2 bump could signal my departure from the platform or sacrificing one of my other services. It all comes down to who’s got the goods, right?
Where do you stand on this potential bit of business? Is Netflix a mainstay on your monthly bill cycle or could a new price-tag see you bailing on the service? Let us know where you’re at in the comments section below.