Her solution: Offer an option that costs only about $5 to $7 a month and features an advertising block of about six to eight minutes an hour.
Those competitors are already charging much lower prices for their streaming plans, between $5 and $7. Granted, most of them don’t have content libraries as vast as Netflix’s, but the challengers have some buzzy shows of their own.
Increased competition
Netflix was not immediately available for comment when asked whether it would consider Martin’s idea of creating a cheaper tier with ads.
Netflix CEO Reed Hastings, content chief Ted Sarandos and other top executives continue to argue that the service is worth the premium price given popular original shows like “Stranger Things,” “The Crown” and “Dark” as well as movies such as “The Irishman” and “Marriage Story.”
Still, Martin said in her report Tuesday she’s worried Netflix could lose international subscribers once Disney and other media companies launch global versions of their streaming services.
“We believe Netflix must add a second, lowe- priced service,” she said in the report. “Netflix’s premium price tier of $9 to $16 a month is unsustainable.”
Martin also noted that Netflix stands to lose a lot of popular content to its rivals. “Friends” moves to HBO Max next year, and Peacock will be home to “The Office” starting in 2021. Much of Disney’s own branded movies and shows —- as well as content from Marvel, Pixar and Star Wars — are in the process of moving to Disney+.
Investors are starting to worry, too. Although Netflix’s stock is still up 11% this year, shares are more than 20% below their 52-week high.
Source : CNN