Chattanooga Times Free Press

Got streaming-service fatigue?

- BY MAE ANDERSON

How much is too much for streaming video?

A dramatic slowdown in worldwide growth at Netflix — including the first quarterly drop in its U.S. subscriber­s since 2011 — is raising questions about just how much are people willing to pay for streaming services. Especially with a host of new ones from Disney, Apple and others on their way.

A recent price increase seems to have spooked Netflix subscriber­s. The company lost 126,000 subscriber­s in the U.S., less than 1% of its 60.1 million paid U.S. subscripti­ons, during the April-June period. Its most popular plan rose from $11 to $13 in a U.S. price hike announced in January and rolled out for many subscriber­s during the second quarter. Worldwide, the service picked up 2.7 million worldwide subscriber­s, far below Netflix’s forecast of 5 million.

“Netflix raising prices prompted people to think about whether they were getting value for money,” Wedbush analyst Michael Pachter said.

While people are willing to shell out for several services to meet their streaming needs, he said, they’re also willing to cancel if they’re not using it enough, just as they would with a gym membership or a subscripti­on to the New Yorker magazine.

Streaming services preparing to compete with Netflix appear to be taking note.

Disney Plus, set to debut in November, will already be cheaper than Netflix at $8 a month, though Disney Plus will also have a smaller video library. Hulu has cut prices to $6 from $8 for its main, ad-supported service. Services from Apple, due out this year, and WarnerMedi­a and NBCUnivers­al, out in 2020, don’t have announced prices yet, although the NBCUnivers­al service will be free and ad supported for traditiona­l cable TV subscriber­s.

Of course, even if these individual services are cheaper than Netflix, it’s not clear how many consumers will be willing to pay for.

Some analysts also believe Netflix’s trouble is temporary.

Canaccord Genuity analyst Michael Graham said the subscriber numbers will likely hit the stock in the short term — the stock was down 11% in midday trading Thursday — but overall the company’s growth remains on track, particular­ly overseas.

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