Netflix Raises Prices, Stock Soars!
Fox Business, Reuters, The Wall Street Journal and others this morning re-cap Netflix’s (NASDAQ: NFLX) move to raise prices for its video streaming service.
If you’re a House of Cards or Stranger Things fan, this impacts you.
The consensus on the move was Netflix needs more cash in the door from subscribers on a monthly basis because it needs more cash to outbid HBO for choice content.
Now, the most popular Netflix subscription will cost $11 a month, up from $10.
While that might not sound like a huge deal, Netflix has 53+ million subscribers in the United States alone. Those dollars add up.
The takeaway is this: Netflix spends over $6 billion a year producing more and more original content.
Their plan to become HBO before HBO can become them continues to gain steam.
Earlier this week, HBO CEO Richard Plepler, speaking to CNBC about “content”: “More is not better, only better is better.”
The market reaction to the Netflix price hike – unbridled joy:
Netflix shares rocketed higher 5.39% yesterday, a move of nearly $10.
This morning, shares are up another $0.91 pre-market, sitting at $195.30.
How Americans access their entertainment has changed radically in the last decade.
Conventional cable is a dying business. That’s one reason why it’s so expensive. Comcast and Verizon are in “harvest” phase.
They’re squeezing you for every dollar they can while they still can.
The future of at-home entertainment is on-demand, unbundled, and provided by multiple companies at relatively low monthly prices. A la carte, if you will.
Netflix leads in this new model. They’ve caused more market “disruption” in the last decade than any other company besides Amazon. Well, maybe Apple too. Or Facebook.
There’s a reason why Big Tech is where all the gains are these days.
These are the companies attacking the old giants and making the future a reality.
Taking a look at the markets this morning…
Market Rundown for Fri., October 6
S&P 500 futures are off a tick this morning at 2,548.
Oil’s down $0.53 at $50.26. Gold sits at $1,270. Silver’s at $16.63.
Returning to our mention of the Russell 2000 from Monday, the small stock index continues its move up.
Pre-market, it’s at 1,512. The Russell 2000 over the past 30 days:
Remember, tomorrow’s Netflix, Apple, Facebook, and Amazon are in the Russell 2000.
The Amazon of cryptocurrencies or the Apple of cannabis stocks might be in there too.
Have a great weekend. Talk with you again on Monday.
For the Rundown,