trending Market Intelligence /marketintelligence/en/news-insights/trending/Crn_TNkKkXz2H63DPiXWlA2 content esgSubNav
In This List

Fitch: Netflix's 'defensive' streaming price hike 'risky'

Podcast

MediaTalk | Season 2
Ep.1: Broadcast's Big Year

Podcast

MediaTalk | Season 2: Back in 2024!

Blog

Global 5G Survey 2023 Fixed wireless access growing but mid-band still No 1

Blog

Essential IR Insights Newsletter Fall - 2023


Fitch: Netflix's 'defensive' streaming price hike 'risky'

Fitch Ratings on Jan. 17 called Netflix Inc.'s recent price hike for new U.S. streaming customers a "defensive and to some extent risky" move, while adding that the company's market-leading position means it "should be a price leader."

In a note on the price increase, announced Jan. 15, Fitch said Netflix is investing in more original content, burning through an estimated $3 billion to $4 billion in cash in 2018, as it contends with the ramp-up of direct-to-consumer streaming offerings from Walt Disney Co., 21st Century Fox Inc., AT&T Inc.'s WarnerMedia, and Comcast Corp.'s NBCUniversal Media LLC. Disney is nearing the end of a content licensing agreement with Netflix as it prepares to launch its own competing service, and Fox is likely to follow suit, given the pending acquisition of its entertainment assets by Disney.

"The effect on Netflix's subscriber growth is uncertain, given the noticeable ramp-up in high-quality, innovative original content ... However, there is risk that yesterday's announcement increases churn and adversely affects the company's growth profile," Fitch said.