Netflix raises rates in bid to fund new television content investment
Published 20/08/2015 | 02:30
Netflix has increased prices by €1 per month for new subscribers in several European markets, including Ireland, to raise funds to add more TV shows and movies. A high-definition plan that lets users stream video on two devices now costs €10 per month, up from €9.
Prices for existing members will be unchanged until May 2016. Netflix, the world's largest subscription streaming service, is relying on markets in Europe and elsewhere outside the US to help drive growth as chief executive Reed Hastings looks for ways to fund the company's expanding budget for content. Netflix added 2.37 million subscribers in international markets in the second quarter, more than double the number of domestic additions. "There's definitely more room for them to grow on the continent," said James Cordwell, an analyst at Atlantic Equities LLP.
"I don't think the price increase will have a material impact on their growth trajectory given it's still a relatively modest sum versus most other pay-TV alternatives." Netflix raised prices worldwide last year, its first increase since 2011.
Tata Capital has said a fund it advises will make a "significant investment" in Uber Technologies to help the ride-sharing service expand in India. The investment by Tata Opportunities Fund will allow Uber to leverage its network in the country, Tata Capital said. It is expected to invest $100m (€91m) as part of the deal. The announcement comes after Uber said it would spend $1bn (€910m) to expand into more cities as the ride-hailing application company targets to hit 1m trips per day in the next six to nine months. Microsoft is said to have agreed to invest about €91m in Uber at a valuation of approximately €46bn.
"Right now, we're particularly focused on building a great service for hundreds of millions of Indians," Uber Chief Executive Officer Travis Kalanick said in the statement.
Alibaba Group Holding and Foxconn Technology Group have pushed further into India by leading an investment of €455m in Snapdeal that values the five-year-old online marketplace at about €4.26bn.
While Snapdeal did not specify the breakdown of the investments, Foxconn and its unit FIH Mobile will invest a total of €182m for a 4.27pc stake. Existing investors SoftBank Group, Temasek Holdings and BlackRock also participated in the round, Snapdeal said in a statement on Tuesday.
Snapdeal is in a three-way battle for dominance in India with local rival Flipkart Online Services and Amazon.
The companies have drawn investors from around the world seeking to repeat the success of Alibaba, which last year held the largest initial public offering ever. In the previous 18 months alone, more than €4.6bn has been invested in Indian e-commerce, resulting in companies hiring Bollywood stars as ambassadors and luring customers with huge discounts.
"India is among the last truly large markets that's still untapped, so everyone wants to get a stake," Pragya Singh, vice president for retail at consultant Technopak Advisors Pvt, said. "The competition will go up, everyone will push hard to get more sellers, and there will be lots of discounts and offers to woo customers."
Alibaba's investment in Snapdeal raises the prospects of a partnership between the two on technology and products. Unlike Amazon's Indian unit, Snapdeal had to develop its technical processes and systems in-house, and there are lot of areas where Alibaba's expertise could come in handy, Singh said. The latest deal expands the list of billionaires backing the New Delhi-based company, with Jack Ma and Foxconn's Terry Gou, joining the ranks of SoftBank's Masayoshi Son and Indian software giant Wipro's Azim Premji. Foxconn's investment included a stake worth €45m bought by FIH Mobile from EBay, the company said.