Netflix Growth Comes From Lower ARPU Subs: Pachter

Netflix must continue hiking prices to offset increasing costs, Wedbush analyst Michael Pachter wrote investors Tuesday, after the streaming service’s Friday U.S. price hike (see 2201140056). “Netflix is approaching a ceiling in most of the high GDP per capita countries for above median income subscribers, while the lower GDP per capita countries appear to be fueling much of the new subscriber growth,” he said. Netflix’s Q4 guidance implies roughly flat average revenue per user from Q3 “as the growth continues to come from lower” ARPU subscriptions, he said.