Piper Jaffray, which raised its PT on Netflix NFLX following yesterday's price increase, is providing some comments on the stock.
“We estimate that ~75% of Netflix subscribers use Watch Instantly streaming,” Piper Jaffray writes. “In other words, these pricing changes will impact most subscribers. If customers choose to abandon DVD-by-mail and downgrade to the streaming-only plans, ARPU would fall, but profitability would rise and Netflix would more quickly accomplish its goal of becoming an internet streaming service.
“If subscribers maintain both DVD-by-mail and streaming, then ARPU will rise, and the profitability of the DVD service will also rise to be more in-line with that of streaming.”
Netflix closed Tuesday at $291.27.
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