Netflix Stock (NASDAQ:NFLX)
Following Oppenheimer’s comment of heightened confidence over the possibility of greater revenue in Netflix (NASDAQ:NFLX) recent efforts, Netflix stock was the top gainer among Communications companies on Wednesday, up 3.8% in the afternoon.
Included in this is the now-widespread excitement around the rollout of Netflix (NASDAQ:NFLX) Paid Sharing initiative, through which the company attempts to discourage the practice of password sharing by providing individual households with a discount on additional subscriptions for non-local friends and family members.
But it also plays into fresh upsell speculation after Netflix quietly discontinued its cheaper Basic plan in Canada, leading some to wonder whether the company will do the same action in its other home market, the United States.
Recent Canadian Netflix pricing includes three standard membership rates (at C$9.99, C$16.49, and C$20.99 per month) plus a C$5.99 per month ad-supported service tier. The C$9.99 Basic Plan is no longer available, but current members may retain it for as long as they pay the monthly fee.
Even though the Basic plan (limited to one concurrent ad-free stream at 720p resolution) is still available in the United States on Netflix (NASDAQ:NFLX), it is not displayed prominently. Instead, the ad-free and top two service tiers are displayed, and users must click “see all plans” to reveal the availability of the Basic plan.
Analyst Jason Helfstein believes dropping the Basic plan in other countries is the “obvious next step” since it would free up $4.4B in yearly income, or 13% of the predicted 2023 total.
Although he anticipates a more measured rollout by location next year, he believes investors may now begin discounting the increased revenue.
He contends that Netflix stock market share growth is unabated and that the company may benefit from the prolonged Hollywood writer strike and the recent media layoffs.
He predicted that a prolonged writer’s strike would affect the traditional back-to-school TV schedule, leading more people to turn to Netflix (NASDAQ:NFLX) because of the streaming service’s superior scheduling flexibility. While domestic material is impacted by the strike, NFLX’s enormous backlog and international content are not. Moreover, Netflix stock is poised to gain from media job cutbacks as rivals battle ad market instability and a revenue drain from subscription services.
Featured Image: Pexels © Luca Sammarco
Author Shariq Khan 
