Netflix’s recent price hikes could cost the company almost 500,000 subscribers, reports analyst Anthony DiClemente.
This could result in the streaming company losing about $520 million (R7.6 Billion) in additional annual revenue for Netflix.
Netflix originally raised its rates in May 2014, but “grandfathered in” its existing customers at the previous rate for two years as a show of good faith.
With these customers now expected to pay current prices, we could see hundreds of thousands jumping ship, writes DiClemente.
“We note that this has long been a tenet of our investment thesis on the domestic business, as slowing subscriber trends are more than offset by increased monetization.”