To be competitive in the market, Netflix, Inc. (NASDAQ: NFLX) has planned to accelerate investments in the production of new shows and films. Consequently, Reuters reports that the streaming platform has lifted prices for subscribers in the United Kingdom and Ireland.
Netflix raised subscription fees in the U.S. and Canada in January.
New Pricing
The standard plan in the U.K., which allows subscribers to stream content on two devices at the same time, will be increased by 2 pounds to 10.99 pounds ($14.48) monthly. Meanwhile, customers with the basic plan will now pay 6.99 pounds, up from 5.99 pounds, while the price for the premium plan will stand at 15.99 pounds ($21.07), up 2 pounds monthly.
According to Netflix, the U.K. is the biggest production hub for the company outside the U.S. and Canada. The country had a content budget of $1 billion in 2020, which resulted in over 10,000 jobs for cast and crew.
In Ireland, the price for the basic plan will be lifted by 1 euro to 8.99 euros per month, while the standard and premium plans are increased to 14.99 euros ($16.58) and 20.99 euros ($23.21), respectively.
The revised price structure has already been implemented for all new members while existing members will receive notice 30 days before their subscription fee payment date.
Notably, Netflix last updated the price in the U.K. in December 2020, while Ireland experienced a price hike in March 2021.
Official Comments
A spokesperson from Netflix said, “Our updated prices reflect the investment we have made in our service and catalog, and will allow us to continue making the series, documentaries and films our members love as well as investing in talent and the creative industry.”
“We have always been focused on providing our members both quality and clear value for their membership. We offer a range of plans so members can choose a price that works best for them,” he added.
Wall Street’s Take
Recently, Wedbush analyst Michael Pachter upgraded Netflix to a Hold from a Sell but maintained the price target of $342. This indicates 4.14% downside potential from Thursday’s closing price of $356.77 a share.
Pachter commented, “While we do not anticipate significant share price appreciation in the near term, Netflix’s first-mover advantage and large subscriber base provides the company with a nearly insurmountable competitive advantage over its streaming peers.”
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 18 Buys, 15 Holds, and 2 Sells. The average Netflix price target of $512.45 implies 43.64% upside potential. Shares have lost 31.8% over the past year.
Estimated Monthly Visits
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), offers insight into Netflix’s performance.
According to the tool, the Netflix website recorded a 0.91% and 18.27% decrease in global estimated visits in January and February, respectively, on a sequential basis. Also, year-to-date website visits have declined 33.15% year-over-year.
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