Survey of Netflix Subscribers Indicates Pricing Power Abroad

International growth is the key for Netflix as it faces intense competition in the U.S. and abroad. Jefferies surveyed Netflix subscribers across the U.S, UK, and India, and found that the streaming service has the flexibility to raise prices in some of its most important markets.

Pricing power overseas: 90% of Indian subscribers and 70% of U.K. subscribers are willing to pay more, according to Jefferies analyst Alex Giaimo, who has a BUY rating and $520 price target on Netflix shares.

• The opportunity in India: With a population of 1.35 billion people and an internet user base of more than 500 million people, India is an incredibly large market opportunity for streaming companies. In December, Netflix CEO said the company planned to invest nearly $400 million during 2019 and 2020 to develop content for Indian viewers. Jefferies notes that Netflix’s recently launched mobile-only plan “should help unlock non-broadband subscribers.” India became the first country where Netflix launched its mobile-only plan, starting at $2.99 a month.

Fan favorite: More than 55% of respondents told Jefferies that Netflix was their preferred streaming service, citing original content. Giaimo believes this weakens the argument that “the loss of second-run TV shows will lead to churn.” Amazon and Hulu were the next closest favorites, with Amazon Prime and Hulu each winning 20% of votes.