Recent Netflix stock news revealed that the company's price hike next month seems to have made its investors nervous. The streaming service has announced that it will be increasing the monthly subscription cost for its grandfathered users.
It was previously reported that Netflix users may soon be paying $9.99 a month for the service. Several longtime subscribers are expected to see their monthly bill increase for next month.
The new price is $2 higher than its previous price point. Since October, new customers have been charged with $9.99 for the service's most popular plan.
According to Forbes, the company's price hike is highly important to investors. The increase would likely result to Netflix losing subscribers, which does not bode well for the streaming service.
"The potential churn impact has been a central question for many investors," Baird analyst William Power wrote to clients. "Due in part to the potential for higher church, Q2 guidance could be under an even greater microscope than normal."
Netflix has to compete with other streaming services such as Amazon, Hulu and HBO. A subscription to Amazon Prime costs less than Netflix's at $99 per year.
There are those who are confident that Netflix's stock will not be affected in any way by the price hike. This is because it is highly unlikely that users will immediately break it off with the convenience that the streaming service has given to them.
Second, Netflix is known for its original content. The company has several original series in store for subscribers after the price hike rolls in next month.
In Netflix stock news from Bidness ETC, it was noted that the company's number of subscribers could help increase the value of its stocks. Although the service did not do well domestically, it has gained quite an impressive international following.
Netflix has recently taken over HBO's spot as the service with the Best Original Content. In a survey conducted by Morgan Stanley, a Wall Street firm, it was found out that about 29% of the respondents picked Netflix as the best in original programming, which was an increase from last year's 23%.