The closing out of grandfathered subscription prices hit Netflix hard in the second quarter, with users churning out of the SVOD service at higher rates than expected, the company reported.
Netflix is continuing to bet big on original content as a way to draw and keep subscribers, a strategy that needs to pay off as investors become increasingly wary of its growth potential in the highly competitive SVOD market segment. But it also needs to hold the line on content costs and ARPU, especially if new users level off, according to analyst firm Jefferies, citing results of a recent survey it conducted.
Netflix's apparent truce with Comcast, which will see its SVOD service stream over the cable operator's X1 set-top boxes in the near future, may have been partially driven by the need to grab more subscribers as its U.S. growth slows and its international expansion appears to be less than stellar.
As Netflix begins to phase out its grandfathered subscription prices in the U.S. – raising monthly rates for some subscribers by as much as $2, from $7.99 or $8.99 to the current price of $9.99 – the SVOD provider could see as much as $520 million per year in additional revenue, according to a Nomura Securities report.
More than 8 billion devices were connected to the web by the end of 2015, according to fresh data from IHS, averaging four devices per household around the world. And Netflix has a presence on many of them.
Netflix, which is notably recalcitrant to reveal its subscribers' precise viewing behaviors, watch times, or other statistics, untied the strings on its data to reveal a little bit more about binge-watching habits.
Netflix's exclusive streaming deal with Relativity Media doesn't mean it gets to release two upcoming films from the production company on its streaming service ahead of their official theatrical release, a judge said Friday in a bankruptcy hearing.
Showtime, like many other premium network providers, initially saw over the top players like Hulu and Amazon as a threat. But now the company sees those SVOD providers as a way to attract a new base of cord-nevers and cord-cutters. The company hopes that it will be able to also work with Netflix in the same capacity some day.
Netflix is setting its lineup for the summer and well into the fall, with a slate of exclusive content scheduled thanks to its relationship with Disney and its related properties-- a deal that will lock out Starz and Amazon from new Disney movies and potentially make the ongoing content licensing battle red hot.
The European Union wants online video streaming giants Amazon Prime Video and Netflix to devote a much larger portion of their libraries to regional content, an attempt by the governing body to force a more level playing field in the SVOD space, according to media reports.