Was the Netflix price a mistake? Shares fall as Hulu reduces rates

By CCN.com: Popular streaming service Netflix made the headlines – and undoubtedly left some customers angry – after a series of price increases that have been the company's largest figure since the launch of its streaming service.

The rise in Netflix rates is it to bite the giant streaming?

As NCC reported, Netflix increased subscription fees by 13 to 18%. The price of his cheapest basic plan jumped from $ 1 to $ 9. The 4K premium plan has been increased from $ 2 to $ 16. Analysts said the rate hike would help fund investments in original films and repay accumulated debt resulting from competition with other popular streaming services.

Securing streaming rights and producing original content is not cheap. Netflix spent about $ 100 million to secure the "Friends" broadcast rights.

Historically, Netflix price increases have generally boosted the stock and resulted in marginal changes in the growth in the number of subscribers. Netflix's latest rate hike in October 2017 allowed the company to gain 3% higher shares for the day, according to CNBC.

However, some have speculated that the streaming landscape may have taken a different turn because of the actions of Hulu, who stated that he would permanently lower the price of his subscription basic advertising-funded $ 2.

Can Hulu get Netflix subscribers?

Hulu has often suspended his basic subscription plan for $ 5.99 per month on a promotional basis. On Wednesday, the company said the price would be permanent as of February 26.

Although Netflix still holds a significant share of the online broadcast audience – with only 58 million US customers – Hulu had 25 million subscribers by the end of 2018.

The Verge said the figure represents a 48 percent increase in the number of subscribers since the end of 2017. Hulu's announcement resulted in Neflix falling by around 1 percent on Wednesday.

However, the drop in Hulu rates also resulted in a price increase. The company said the cost of Hulu Live TV would increase from $ 39.99 to $ 44.99.

Hulu said the increase coincided with more channels available after reaching an agreement in September with Discover Inc. and made other improvements to reliability and usability.

In an effort to apparently mitigate this increase, Hulu has lowered prices for optional supplements such as enhanced DVR and extended multi-screen viewing packages.

What does the future look like now?

While Netflix seems to have abandoned pure growth to focus more on profitability, Hulu's future is darker because of Disney's influence. He is about to become a majority shareholder in Hulu after the acquisition of Twenty-First Century Fox.

The deal is expected to be completed in the first half of 2019. Until now, Hulu staff members were dumb about what the acquisition would mean for the future of the streaming service and its price.

Disney executives said Hulu would remain an important part of the streaming strategy.

However, Comcast stated that it did not plan to sell its 30% stake in Hulu quickly, and that WarnerMedia still retains 10% control of the company.

This means that a decision on the way forward for Hulu, at least in the short term, could be a decision with multiple angles of view.

Featured image of Shutterstock. TradingView Price Charts.