Home / FINANCE / UBS: Netflix ideally timed the cost boost to safeguard we won’t leave (NFLX)

UBS: Netflix ideally timed the cost boost to safeguard we won’t leave (NFLX)

Reed HastingsREUTERS/ Mike Cassese

On Thursday, it emerged that Netflix would be augmenting a prices for a subscription services, and investors seemed to adore it.

The company’s batch shot adult 5.36% on Thursday after reports on a cost increase. Investors were happy to see an estimated $623 million in new income for a company.

But a new income will usually come if Netflix doesn’t remove a ton of subscribers because of a cost increase. In sequence to extent a losses, Netflix timed a cost travel ideally to coincide with a inundate of new content.

This timing coincides with what we design will be a clever fourth entertain of 2017 calm slate, that could assistance minimize churn,” Doug Mitchelson, an researcher during UBS, pronounced in a note to clients.

Analysts, and even Netflix itself, frequently indicate to popular strange calm as a best approach to attract and keep customers. In a fourth entertain of 2017, Netflix has set adult some potential hits. The association is releasing a second deteriorate of “Stranger Things”, a Will Smith-led strange film “Bright,” a initial deteriorate of “Marvel’s The Punisher” and a reconstruction of Emmy winning “Queer Eye,” to name a few. 

Netflix pronounced it schooled a lot of lessons about how to best hurl out cost increases after an unpopular boost was carried out in 2016. Mitchelson combined that “[Netflix] management would be doubtful to exercise such a cost boost if U.S. subscriber trends were disappointing, bolstering the certainty further.” 

Mitchelson rates Netflix a buy with a cost aim of $225.

Netflix has grown 55.72% this year and jumped another 2.2% on Friday.

Read some-more about Netflix’s former VP of talent and her new pursuit here…

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