In 2011, Netflix said it would divorce its DVD-by-mail service from its streaming one. The company has a bumpy history of price hikes. Wall Street welcomed news about the rate increases, with Netflix shares rising more than 6 percent to around $355 in trading midday Tuesday. Without enough money coming in from members to fund all its investments, the company has been taking on large sums of debt to keep expanding the number of shows and movies it makes and to continue upgrading its product. Netflix has long aggravated financial watchers with its eye-popping budgets despite its persistently low subscription price. Watch this: Netflix's price hikes are coming quick Its previous rate hikes usually had advance notice of several months to a year before they went into effect for existing members. ![]() But the company is pacing these increases faster than it has before. In the past, Netflix has rolled out price increases to its newer members first and its most loyal subscribers last. New members will be signing up at the new rates immediately, and existing members will see their bills rise progressively over the "next few months," Netflix said. ![]() The company also will increase the cost of its cheapest plan, the basic tier that streams to only one device in standard definition, by a buck to $9 a month from $8, the first increase to that entry-level price in almost eight years. The premium tier, which unlocks four simultaneous streams and ultra-HD video in addition to HD quaility, will rise to $16 a month from $14. Even though Netflix has invested heavily in original programming over the past year, some of its most popular shows, like "Friends," are still available through licensing agreements.Netflix's standard plan - its most popular, allowing two simultaneous streams and offering HD-quality video - isn't the only one getting a $2 price hike. Original content will be more important than ever as more streaming companies throw their hats in the ring. Netflix will continue to transition away from licensed content and toward its originals in 2019. The Morgan Stanley analysts predicted most traditional TV/studio owners would not pivot to streaming and instead opt to "live in the studio side of the streaming value chain, producing exclusive first-run content for Netflix, rather than launching global branded streaming platforms." Netflix will rely less on licensing agreements The analysts said that there could be multiple winners in the streaming video space and that linear TV viewership would continue to decline. "First, we believe Netflix's opportunity comes from the nearly $500bn global TV market, of which total subscription OTT still represents less than 5% of revenues," Morgan Stanley analysts said. But the analysts also said three factors kept them positive that Netflix could as well. Netflix is expected to have a solid 2019 even as more competitors emergeĭisney is expected to launch its own direct-to-consumer service in late 2019, called Disney Plus, and Morgan Stanley analysts said in a report on Friday that they believed Disney could succeed in the crowded streaming market. ![]() "We expect subscriber momentum will continue as Netflix continues to improve its service and the global shift to streaming broadens and given the strong 2H18 growth performance," Credit Suisse analysts wrote in a report published on Thursday. Of the 17 originals, most hailed from India, where Netflix is fighting hard to gain traction since it can't operate in China without a local partner. Netflix announced 17 new Asian original programs in November in an effort to break through, since the company had yet to exceed 2 million subscribers in any Asian market. "Emerging markets in Latam & Asia (e.g., India) are the bright spots on local language content push," UBS continued. Account icon An icon in the shape of a person's head and shoulders.
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