Question

Can you explain Netflix's rising content costs and how it can maintain market share due to competition. What should be Netflix's strategy on expanding into future?

Answer 1

Netflix is raising monthly subscription costs by the maximum amount as eighteen % within the us, the biggest rate hike in its history, as company executives search for more cash to pay escalating content bills.
Although Netflix has hiked costs within the past, this is often the primary increase which will be applied to all or any U.S. subscribers, also as subscribers in occupant and therefore the Caribbean, wherever Netflix bills in U.S. dollars. the foremost common subscription arrange can currently value $13 a month, up from $11. the most cost effective subscription can run $8.99, up from $7.99.
The move is an endeavor by Netflix to extend its revenue as its subscription growth within the us slows. the corporate has fifty eight million domestic subscribers.
“We amendment rating from time to time as we tend to continue finance in nice diversion and rising the Netflix expertise for the advantage of our members,” a Netflix interpreter same in an exceedingly statement. Customers are going to be notified of the rise by email and thru the Netflix app a minimum of thirty days before the value hike takes effect; temporal order can vary betting on the customer’s charge cycle.
The price increase can facilitate subsidize Netflix’s high content prices for each authorised and original shows, that the corporate last year pegged at $8 billion. associate degree assessment from Goldman Sachs has place the amount as high as $12 billion.
Netflix has wanted to stay the subscriber wheel turning by giving a slew of recent content, paying many  greenbacks to top-tier creators, like Shonda Rhimes and Ryan root vegetable, to maneuver their production corporations in-house and infrequently outbidding rivals on individual comes. authorised content may be dear, too — the corporate simply paid $100 million to stay reruns of the ’90s programme “Friends” on the service.
The corporate has additionally had to make sure value will increase don’t place a damper on new and existing subscriptions. Executives have talked in recent quarters regarding rigorously managing content payment as subscription growth — the company’s solely revenue stream — has slowed within the us. What has frequently been annual will increase of quite fifteen % has hovered at near to ten % the past 2 years.

Netflix already planned some good ideas for future, suggesting them as follows

*Netflix has set its sights on Asian country because it ramps up its Asian enlargement strategy.
*The media streaming company aims to feature a hundred million subscribers within the South land over the approaching years.
*To bulk out its regional audience, Netflix plans to form a hundred domestically made comes.