How Investors Are Reacting to Netflix's Price Increase

The video discusses Netflix's financial strategy, highlighting its significant investment in content despite negative cash flow compared to traditional media companies. It explores the sensitivity of Netflix's subscriber base to price increases, referencing past instances where price hikes led to subscriber loss. The video also examines Netflix's competitive position in the streaming market, noting its substantial content offerings and comparing its pricing to other services like Hulu and YouTube.

What is a key reason investors buy Netflix shares despite its negative free cash flow?

• Strong current profits

• High dividend payouts

• Bet on future growth

• Low operational costs

How did Netflix handle its price increase in 2015?

• They immediately applied it to all subscribers

• They offered a discount to new subscribers

• They grandfathered in existing subscribers

• They reduced the content budget

What is a significant challenge Netflix faces when increasing subscription prices?

• Higher production costs

• Increased competition from cable TV

• Decreased content quality

• Loss of subscribers

How does Netflix's pricing compare to other online TV services like Hulu and YouTube?

• Netflix is more expensive

• Netflix offers fewer features

• Netflix is less expensive

• Netflix has the same price

What might make Netflix's current price increase different from past increases?

• Improved customer service

• Increased content offerings

• Decreased competition

• Lower production costs