Rafi Mohammed

Netflix's Price Increase Should Concern Investors

Posted on January 30th, 2019 (0 Comments)

Netflix recently instituted a 12% – 18% price increase for its streaming services. A few bucks isn’t going to cause a mass exodus, but it does create opportunities for current rivals (Hulu, Amazon) as well as those on the horizon. AT&T, Disney, Comcast, and Apple are all rumored to be entering the streaming market. That’s pretty formidable competition!

Please check out my first piece for Barron’s as it pitches (and supports) two contrarian ideas: (1) In direct contrast to most analysts, I think Netflix’s future uber-success is far from a slam-dunk and (2) I argue that Netflix’s decision on whether to raise prices has not been an elasticity issue – it’s been a valuation decision.

As always, thank you for reading!

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