Tuesday, July 19, 2016

Netflix "Ungrandfathered" Me

Hey Webster Dictionary, it's time to add a new word - ungrandfathered.  Per Netflix, it is the act of eliminating any price discount associated with being a long time subscriber and substantially raise your monthly fee to match with new subscribers.  And while Netflix may see a revenue bump, they may also face higher than typical churn rates too.  And with significant competition from Amazon, Hulu and others, Netflix can't expect rate increases to help their future. 

Of course, Netflix has more to worry about as my blog yesterday detailed.  When quarterly financials came out, Netflix failed to hit a number of metrics, including important growth numbers.  And while there was some growth, it was well short of expectations.  Churn will only erode those gains.  It is time for Netflix to actively find additional revenue streams to drive business growth.  And they must start soon.