Motley Fool Money Price Hikes or Push to Ad-Tier?
Oct 20, 2023
Jason Moser and Matt Argersinger dive into Netflix's dramatic price hikes and the implications of its new ad-supported tier. They discuss how affordable EVs are impacting Tesla's margins and reflect on Costco's successful leadership transition under Craig Jelenik. McKeel Hagerty, CEO of Hagerty, shares insights on insuring classic cars and connecting with car enthusiasts in unique ways. The conversation also highlights strategic stock picks like Chipotle and Home Depot, providing a comprehensive take on current market dynamics.
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Netflix's Pricing Strategy
- Netflix demonstrates pricing power with increases on its ad-free tier.
- The ad-supported tier attracts new subscribers and offers a lower-cost option, boosting profitability.
Netflix's Growth Levers
- Netflix's premium tier now costs almost double what it did in 2013, reaching $23 per month.
- The company seems to be driving growth through pricing power, an ad-supported tier, and a password crackdown.
Impact of Paid Sharing
- Netflix added 9 million subscribers, exceeding expectations, partly due to its paid sharing initiative.
- This paid sharing approach, also adopted by other streamers, boosts subscriber numbers and profit margins.