Are We Sure Coronavirus Fears Will Benefit Netflix and Other Streamers?
With the novel coronavirus outbreak spreading throughout the U.S. and the world, inciting fears of contagion, conventional wisdom tells us that more people will choose to stay home — watching Netflix, Disney+, Amazon and other streaming services. That same wisdom suggests the expected increase in streaming hours could be a boon for those streaming platforms; however, it’s a little more complicated than simply: More hours; better business. For a business centered on subscriptions and not advertising, a bump in viewership without also a significant bump in subscribers isn’t going to translate into big dollars. Also Read: Movie Theaters to Remain Open in Santa Clara During Coronavirus 'Mass Gatherings' Ban “Netflix charges a fixed price of $9 to $16 per month in the US, regardless of how many hours are watched. We have been arguing that Netflix needs a $5 to $7 a month price subsidized by $5 to $7 per month of ads to compete with new streaming entrants at $5 to $7 a month,” Needham Analyst Laura Martin wrote in a note to investors on Tuesday. “Another strong reason to offer an ad-driven tier is that more viewing hours for any reason would allow Netflix shareholders to participate in...
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