2019-01-25 13:34:00 Fri ET
trust perseverance resilience empathy compassion passion purpose vision mission life metaphors seamless integration critical success factors personal finance entrepreneur inspiration grit
Netflix raises its prices by 13% to 18% for U.S. subscribers. The immediate stock market price soars 6.5% as a result of this upward price adjustment. The baseline subscription now costs $9 (up from $8) per month. The most popular HD standard plan costs $13 (up from $11); and the 4K premium plan costs $16 (up from $14). These price increases take effect for new subscribers and will apply to the current Netflix subscribers in the next quarter. There are good economic reasons for these retail price increases. First, the U.S. aggregate demand for Netflix video streams is inelastic in the sense that price increases can compensate for any potential loss of current subscribers. Due to the low price elasticity of demand for Netflix original content, the same video streams are likely to boost sales and profits with minimal negative impact on the current scale of the Netflix subscriber network.
Second, Netflix requires greater cash inflows to strengthen its financial resilience. Meanwhile, Netflix borrows funds to close the cash-flow gap between regular cash outlays and revenue intakes. The recent price increases can therefore help reverse this financial situation. Historical experiences further support the business case for higher prices in light of the Netflix cash burnout dilemma. Overall, the recent Netflix price increases make much economic sense.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2019-09-07 17:37:00 Saturday ET
Federal Reserve Chair Jerome Powell announces the monetary policy decision to lower the federal funds rate by a quarter point to 2%-2.25%. This interest rat
2019-07-05 09:32:00 Friday ET
Warwick macroeconomic expert Roger Farmer proposes paying for social welfare programs with no tax hikes. The U.S. government pension and Medicare liabilitie
2023-04-07 12:29:00 Friday ET
Timothy Geithner shares his reflections on the post-crisis macro financial stress tests for U.S. banks. Timothy Geithner (2014) Macrofinanci
2019-09-11 09:31:00 Wednesday ET
Central banks in India, Thailand, and New Zealand lower their interest rates in a defensive response to the Federal Reserve recent rate cut. The central ban
2017-03-27 06:33:00 Monday ET
Goldman Sachs chief economist Jan Hatzius says the Federal Reserve's QE exit strategy makes sense ahead of Fed Chair Janet Yellen's stepdown in 2018
2018-07-09 09:39:00 Monday ET
The Federal Reserve raises the interest rate again in mid-2018 in response to 2% inflation and wage growth. The current neutral interest rate hike neither b