Therefore, expect price rises in all key markets." "It needs to recoup this by adding customers more quickly, increasing prices or taking on more debt. "Worryingly, the company is burning through a lot of cash," Paolo Pescatore, an independent tech, media and telco analyst, said in a note reacting to Netflix's Q4 results. In Q4 2018, it had $19.3 billion in streaming content obligations. Netflix finished the year with $3.8 billion of cash and said its $500 million unsecured credit facility remains undrawn. "Our focus is not on Disney+, Amazon or others, but on how we can improve our experience for our members." (See Disney Dispenses Details About Its New Streaming Service.) "We compete with (and lose to) Fortnite more than HBO," the company said. Netflix also took some swipes at its competition. "We are ready to pay top-of-market prices for second-run content when the studios, networks and producers are willing to sell, but we are also prepared to keep our members ecstatic with our original content if others choose to retain their content for their own services," Netflix said in its Q4 investor letter.
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(See Study: 8% of Netflix Subs Likely to Cancel Service Amid $1 Price Increase.)ĭespite some analyst concerns about its heavy spending on content, Netflix has no plans to slow that pace down, and expects to continue to splash cash even more heavily on originals as other studios and programmers start to pull back rights to movies and TV shows for their own, forthcoming OTT video services. Earlier this week The Diffusion Group (TDG) released a consumer study indicating that 16% of Netflix subs are likely to either downgrade to a lower tier or cancel the service altogether if the price rose just $1 per month. Netflix execs will likely be asked during today's analyst call how much they expect the US price increase to boost subscriber churn rates. (See Netflix Raises Prices as Content Spending, OTT Competition Heat Up.) Netflix increased pricing in Canada and Argentina in Q4 2018, and in Japan in Q3 2018. Netflix said it expects its new, higher pricing in the US - for new members today and to be phased in for existing members over Q1 and Q2 2019 - will lift its average selling price numbers, which rose 3% in Q4. Netflix shares were down $11.19 (3.17%) to $342.05 in after-hours trading Thursday. Netflix said Q4 revenues were $4.19 billion, short of the $4.21 billion that Wall Street expected. The company expects to add 8.9 million subs in Q1 2019 and end the period with 148.16 million. (Nasdaq: NFLX) guidance that it would add 7.6 million paid subs in the period. Q4 subscriber results, which were up 25.9% year-on-year, beat Netflix Inc. In the wake of plans to raise prices across the board in the US, Netflix said it added a record 8.84 million paid streaming subscribers – 1.5 million in the US and 7.3 million internationally - in Q4 2018, pushing its global total past 139 million.