So we know that streaming giant Netflix (NFLX) recently launched a price hike. This has, of course, sat poorly with the people who actually pay those bills. But what if there is a larger master plan at work here? What if Netflix would really rather you not have an ad-free subscription at all? This idea caught shareholder attention, based on the nearly 3% jump in Netflix shares seen in the closing minutes of Thursday’s trading.
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It is no surprise that people got to wondering what was up with Netflix’s move to shove yet another price hike down customers’ throats. After all, it had just saved a huge pot of money by not buying Warner Bros. Discovery (WBD), and had landed a $2.8 billion breakup fee in the process. So why did Netflix suddenly need to get more cash out of people who were probably not interested in paying more money?
The idea is that, possibly, Netflix wants to make its ad-free tiers so inhospitable to end users that they all walk away in favor of the ad-supported tiers. While the ad-supported tiers are less expensive, they represent a two-sided payday to Netflix. The subscribers pay, and then, the advertisers pay to get access to the subscribers. And the more ad-based subscribers Netflix has, the better a case it can make to the advertisers to buy ad time in the first place. This has not been confirmed to be the plan, but the dots certainly do connect.
More To Watch
Regardless of the plan that viewers watch from, though, Netflix has no shortage of content coming out in the month of April. There are nearly a hundred new entries coming to Netflix’s roster just in April alone, including new films and new seasons of complete series.
Highlights include the premiere of the Stranger Things animated spin-off Stranger Things: Tales from ’85, the Madagascar trilogy, and Halloween Ends, the last film in the Halloween sequel trilogy. Netflix never gives without taking, though, so look for a range of movies and series to depart the platform as well. Titles leaving Netflix’s roster include alien immigration title District 9, all five seasons of Van Helsing, and all four seasons of Black Sails.
Is Netflix Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 30 Buys and 11 Holds assigned in the past three months, as indicated by the graphic below. After a 4.19% rally in its share price over the past year, the average NFLX price target of $113.97 per share implies 15.47% upside potential.
