Netflix gained $25 billion in market cap after a survey found subscribers plan to stick around after the pandemic
Netflix shares jumped 12% on Wednesday, boosting the video-streaming giant’s market capitalization by more than $25 billion.
The stock-price surge came after a Piper Sandler survey of streaming and cable TV subscribers found that 41% plan to remain Netflix users after lockdown rules are lifted, compared to 28% for Amazon Prime Video and 17% for Disney Plus.
A second poll found that most Netflix users would be willing to pay more for the service.
The surveys suggest that Netflix will retain a chunk of the 10.1 million paid memberships it added last quarter, and could raise prices without users revolting.
Netflix stock soared 12% on Wednesday, adding more than $25 billion to the video-streaming service’s market capitalization, after a survey indicated it will retain a chunk of the subscribers it added during lockdown.
The company’s shares closed at $547.53, just $1.20 below their record closing price of $548.73.
The Piper Sandler poll of 1,000 streaming and cable TV subscribers on August 25 found that 41% intend to keep using Netflix after stay-at-home rules are eased, according to Street Insider.
In comparison, only 28% of those surveyed said they would continue to use Amazon Prime Video, 19% committed to cable TV, 17% said Disney Plus, and 7% said HBO Max.
Moreover, a separate Piper Sandler survey of 600 people found the majority of Netflix subscribers are willing to pay an average of $2.20 more per month for the service.
The surveys suggest Netflix will hang on to a significant numbers of the users it gained during the pandemic, and can push through price increases without sparking a subscriber exodus.
Netflix added 10.1 million paid memberships last quarter, dwarfing the 2.7 million it added in the second quarter of 2019. However, it only expects to add 2.5 million subscribers this quarter, as the pandemic may have led to some people signing up earlier in the year than they otherwise would have.