Netflix price hike amid slowing customer growth has many wondering: Are we streamed out?
CBC
Like many Canadians subject to COVID-19 related restrictions, Suzan Lorenz has spent a lot of time watching online streaming services during the pandemic.
Where once she made do with just Netflix, with three kids under one roof, she finds herself subscribing to more services than she originally anticipated when she cut her cable cord several years ago.
"You end up paying for more and more and more things," she said in an interview. "It increases the spectrum of who you're paying to access."
Lorenz says she hasn't done the math on what she's paying for three streaming services every month or compared that to her old cable bill.
"I probably should," she said. "And I'll be shocked to realize that I should probably just pay the damn cable companies.
"We're all being had a little bit."
She's not the only one starting to think so.
After more than a decade of double-digit growth, subscription additions at Netflix are slowing, the company revealed in its quarterly earnings this week.
The fourth quarter is typically the best one of the year for the company that basically invented online streaming. And while it's total number of paying customers around the world grew from close to 214 million people in the third quarter to just shy of 222 million, that figure fell well short of analyst expectations.
Even worse, Netflix said it is on track to add just 2.5 million new customers in the next three months, far fewer than the four million it added in the same period a year ago.
Slowing growth was too much for investors, who sold the company's shares heavily on Friday, pushing the price down by 20 per cent. For John Lynch, chief investment officer for Comerica Wealth Management, the reason for the sell-off is obvious: "If everybody already has Netflix, it's hard to improve subscriber growth."
No wonder the company raised its prices in the U.S. and Canada again this week. Its costs for new content are going up, and it can't pay for it simply by finding new customers.
If free services and those based on user-generated content are included, there are hundreds of streaming services now available, Jon Giegengack with Hub Entertainment Research told CBC News in an interview.
"People's adoption was already expanding at a pretty rapid rate, and then, the pandemic struck and kept everybody locked up in their homes with a lot of time to kill," he said.
