I need the answer for no.2 and no.5 Netflix Price Increase Hurts Membership Netf
ID: 1166664 • Letter: I
Question
I need the answer for no.2 and no.5 Netflix Price Increase Hurts Membership Netflix experienced some membership turbulence in 2016 as a price increase was phased in subscribers. In May 2014, Net for its US flix announced that the price of its standard subscription service would increase from $8 to $9. However, established customers were allowed to stay at the $7.99 price for two years. In 201 Netlix increased the standard price to $9,.99. As a result of the pricing plan and the deferred price i May, 2016, the standard 59.99 the second quarter. g plan for long time customers per month. Netflix began notifying customers in April that the price increase would become effective in Netflix was trying to implement price increases more slowly after a 2011 increase led to negative publicity and a customer backlash. In that case, Netflix separated its streaming and DVD services, and charged separately for both services. However, regardless of the implementation of the price increase, the higher monthly prices seem to have impacted the growth of membership among US subscribers. In the two quarters before the price increase, Netflix added net membership of 1.6 million and 2.2 million members. By contrast, the number of members added in Q2 was only 160,000, and in Q3 only 400,000. The Q2 growth in US subscribers was the lowest since Netflix began reporting those numbers in 2012. US Streaming (millions) 2 2015 3 2015 Q4 2015 12016 92 2016 Q3 2016 1304 475 1026 340 Revenue Contribution Profit Contribution Margin Paid Memberships Total Memberships Net Additions 1106 379 34.3% 43.4 44.7 1.56 1161 413 35.6% 45.7 47.0 2.23 1064 1208 414 34.3% 46.0 32.3% 42.1 16,4% 46.5 33.1% 41.1 42.3 0.90 432 47.1 0.16 47.5 0.40 0.88 Monthly Revenue per $8.33 8.43 8.49 8.478.75 9.40 Paid Member Percentage Chg. Rev Percentage Chg. 3.7% 3.9% 5.0% 4.0% 79% Memberships 53% 0.6% 0.9% Source: Netflix 100 03, 2016Explanation / Answer
2) Ans= The average membership growth before the price increases was 1.2 in the year 2007, 1.9 in 2008 and 2.9 in 2009. However, before the Netflix increase the menbership price, the average subscribtion of till 2010 was about 7.7 million subscriber membership nearly 3.1 million arrived in the fourth quarter alone. The company yield in the streaming higher profit more than the produce of DVD. Netflix expand its subscriber in the Q3 and finance more in the year 2012 around the globe. Before the price increases. the price of the subscribtions servive was only $7.99 to $8. This makes the million of subscriber growth during before the 4Q. Before the price increase the net additions of the subscriber in Q3 was 0.90 but it decrease to 0.88 in the Q3. But the total average member ship subscriber were increase to 42.3 to 43.2 alone in Q2 and Q3.
5) Ans = After increasing the price in subscriber service to $9 to $9.99, There is a possible to double up the average profit margin or the revenue. Because as the price of the subscriber increses the average membership subscriber in 2016 Q2 is 47.1 but it increases to 47.5 in 2016 Q3.