Netflix isnt “chilling”
Few years after Netflix came with a big statement -the big days for TV were about to finish- it did not only reinvent the online streaming and improved it. Netflix services allows customizing your preferences and your account for your favorite shows and movies. Getting rid of ads couldn’t have been more simple and cheaper with an accessible subscription fee.
Nevertheless, after its public offer, Netflix failed to keep investors happy with a slow domestic growth and an increasing competition. Down by 12.7% in the stock market proved that.
Now with a fierce strategy, Netflix is not only reinventing streaming traditional TV shows online. Now its original productions (TV shows, mini series and movies) are driving subscribers around the world and specially its home and biggest market.
– 50 percent more that the expected increased in subscribers give the company a 20% burst in its shares.-
The factors why Netflix wasn’t been doing so well in the market are linked to its business model, and its challenges in strategies to grow and attract new subscribers. Unlike traditional TV, Netflix depends mainly from its subscribers to make any profit.
Its marketing strategy, allows a one-month free subscription that draws in a lot of subscribers. Although at the end of the month might not turn into payable subscriptions. As Netflix’s main competitor remains being the illegal streaming and downloading which is for free.
Earlier this year the CEO, Reed Hastings announced a “gradual” rise in the subscription price. Started in May with a hike in 2$ on the standard monthly subscription, facing the risk of driving subscribers away. –An estimated of 480,000 subscribers. – For that risk, Hastings stated that the profits would surpass the loss on subscribers.
Finally is coming clear to every shareholder to see his or her investment reach its potential when it was announced the increase in subscribers and new markets. The impetus brought by the new series and subscribers might have given Netflix the boost it needed.
But despite of the great sums of resources allocated to the latest productions and entering new markets, the only thing investors will be watching this year will be more original releases. Profits aren’t expected to be significant until 2017, gladly, the origial series and movies promise to keep everyone entertained in the meantime.
Information retrieved from