Netflix growth in Europe continues but subscribers should be more interested in the latest price rise

According to analysis by Ampere Analysis (Netflix becomes the second largest TV group in Europe it’s good news for the company as it is now second only to Comcast (who own Sky) in Europe. The link is worth following, if only to see the useful graphic of TV group market share by revenue. Europe is a fragmented market with many components and local broadcasters. Comcast accounts for 12%, followed by Netflix at just over 6%. German public broadcaster ARD is next at around 5.7% with the BBC accounting for 4.2%, followed by the Canal group at 3.2%. Clearly it’s not a level playing field as European territories are of wildly different sizes, and we don’t know if the BBC figures include BBC Worldwide or even the licence fee. It does give an interesting perspective.

Of course revenue and profit are different and Netflix subscribers can look forward to the following email:

We’re updating our prices – here’s why

Hi Subscriber,

We’re updating our prices to bring you more great entertainment. Your monthly price will increase by £2 to £13.99 on 15 February 2021.

This update will allow us to deliver even more value for your membership – with stories that lift you up, move you or simply make your day a bit better.

It ends with links to various shows, including Bridgerton and Snowpiercer. This price is for the top four device 4K HDR package. Netflix isn’t alone in raising prices by this amount (Disney+ is doing the same) and the market is at an early stage. There are new subscribers to get, the market is still forming, and people can’t go out a much at present, so a month’s subscription is better value than any trip to the cinema we can’t take in lockdown. At some stage (in the next 3-5 years we suspect) saturation will kick in and competition begin (or new forms of subscription and/or loyalty pricing), but until then it is what it is.

At the prices given, this is a 17% rise. Repeating this every two years sees prices at around £20 per month in 2025, and over £30 in 2031. Of course a lot will change by then but it is well above current inflation levels. In the end we expect the bulk of subscribers will soak this price rise up given the amount of content still in the pipeline, even with the pandemic (which affects all production houses), we will likely still remain a continent of streamers for some years to come and Netflix growth in Europe will continue.