Bernstein media analyst Todd Juenger said Tuesday that Netflix could be readying widespread price hikes across Western Europe this year, in line with its earlier increases in the United Kingdom, Germany, Japan and Argentina.

Juenger tracked Netflix pricing across 50 countries and said the SVOD giant’s strategy is pretty clear -- increase pricing every two years; raise charges aggressively for its Premium package, moderately on its Standard plan and rarely on its Basic plan. He added that on average, the price increases are in the mid-single digits.

“After very little pricing activity in 2020, evidence is growing that we will see widespread pricing increases in 2021,” Juenger wrote in a note to clients, pointing to “significant” price increases in Q1 in the U.K., Germany (bringing pricing in line with Austria and Ireland); Japan and Argentina. 

Netflix raised pricing for its Standard plan in Canada by about $1 per month and by $2 per month for its Premium plan in early October and three weeks later raised pricing for Standard and Premium plans in the U.S. by similar levels. Juenger estimates that Austria, Ireland and Germany could prove to be similarly “leading indicators” for price hikes in Europe, “perhaps a more gradual roll-out across the Continent rather than one uniform, lockstep pricing change.”

In the United Kingdom, Netflix raised prices for its Standard plan by $1 per month (11%) and by $2 per month for its Premium plan (17%) in January. That same month German customers saw pricing for the Standard plan rise 8% and 13% for the Premium plan. In Japan, Netflix said in February that it would raise prices for the Basic and Standard plans by 13% each. The biggest percentage hikes were in Argentina, where Netflix said in Q1 that  it would raise pricing for all tiers --  Basic (40%), Standard (44%) and Premium (49%). Juenger added that the increases in Argentina were likely due to high inflation rates in Latin America and efforts to account for the decline in exchange rates compared to the U.S. dollar over the past year. He said that Netflix rates in Argentina are roughly 60% lower than in the U.S., in U.S. currency.

Netflix has been under some pressure recently as some analysts have pointed out that the service has lost as much as 31% of its global market share (despite gaining 40 million customers) given the increase in competition from new streaming services like Disney Plus, HBO Max, Paramount Plus and Peacock. 

On Tuesday, Netflix stock was up as much as 2.5% ($13.49 each) to $554.16 each in early trading, a day after  Evercore ISI Group internet analyst Mark Mahaney assumed coverage of the company, upgrading his rating on Netflix stock to “outperform” and raising his price target on the stock to $665 per share. Mahaney was encouraged by Netflix’s large cash position, which enables it to invest in more content, which in turn leads to more subscribers. Adding to that strength is Netflix’s massive platform coupled with a global recommendation algorithm that the analyst wrote has the power to transform good content into global sensations. As an example he pointed to shows like The Queen’s Gambit, which he wrote on its own made “chess cool again.”  

“Simply put, a dollar spent at Netflix arguably creates more marketing power than any other platform, generating greater leverage and potentially more subs,” Mahaney continued.

Shaw Communications stock began to slip March 18, down nearly 2% in midday trading, as reports began to mount that the Canadian telecom company’s planned $20 billion merger with Rogers Communications could get some regulatory pushback. 

Rogers said March 15 that it had agreed to purchase Shaw in a cash and assumed debt deal worth about $20 billion. The transaction, which valued Shaw shares at C$40.50 ($32.55), was approved by both companies’ boards of directors and was expected to be completed in the first half of 2022. 

Shaw’s stock immediately rose after news broke -- it went as high as $28.05 on March 15, a 46.5% increase from its March 12 close -- but the stock was still far off from Rogers’ offering price. That the stock peaked at $28.17 per share on March 16 (13% below the offering price), and that gap continues to widen -- Shaw stock traded as low as $27.54 per share on March 18 before closing at $27.55, down 1.7% -- has caused some analysts to wonder whether the deal will face some harsh scrutiny. 

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The deal will be reviewed by three Canadian regulatory agencies -- the independent Competition Bureau of Canada, the Canadian Radio-television and Telecommunications Commission, and the Department of Innovation, Science and Economic Development. According to reports throughout the Canadian press, the main issue appears to be the removal of a fourth wireless carrier -- a sticking point with Canadian regulators -- and even Rogers’ promises to keep prices level for Shaw’s Freedom Mobile plan for three years and boost deployment of 5G may not be enough.

Rogers has pledged to invest C$2.5 billion ($2 billion) in 5G networks across Western Canada, creating up to 3,000 new jobs. In addition, Rogers promised to create a  C$1 billion ($800 million) fund dedicated to connecting rural, remote and Indigenous communities to high-speed internet across the four Western provinces and spend another C$3 billion ($2.4 billion) to support additional network, services and technology investments 

While the regulatory agencies have pledged to scrutinize the deal, some Canadian politicians have expressed doubt about the benefits of the merger.

“Big telecom companies are gouging Canadians and continuing to make massive profits in a time where most families are struggling to get by. A merger between two of Canada’s biggest providers will just make it worse,” New Democratic Party leader Jagmeet Singh said in a statement after the deal was announced.  

On the conservative side, MP Pierre Poilievre, the Conservative Shadow Minister for Jobs and Industry, called for hearings into the proposed deal. 

“Some argue the Rogers-Shaw deal means more investment, others that it means less competition,” Poilievre said in a statement. “The only way to know for sure [is] through careful and intense debate. Conservatives want the Industry Committee to hear from customers, workers, business leaders, engineers, economists and other experts to get a complete understanding of the proposed deal.”

Poilievre added that the deal, which would create a C$50 billion telecom powerhouse with C$20 billion in annual revenue, 33,000 employees and about 13 million wireless customers, would be important in any era, but is especially critical during the COVID-19 pandemic, which has forced many Canadians to work from home. 

“If some communities cannot get fast, affordable connections, their people will be left behind.” he continued. “Conversely, fast, affordable wireless combined with remote work could revive struggling rural, remote and indigenous economies like we have not seen since the urbanization phenomenon began. For it to happen, we can no longer accept poor internet at high prices.”   

Canadians pay some of the highest cell phone bills in the world. According to a report by Finnish telecom research company Rewheel, the Big Three Canadian wireless service providers -- Bell, Telus and Rogers -- had the least competitive rates globally. Other reports have compared Canadian wireless rates between 15% and 40% higher than in the U.S. 

It has become such an issue that reducing Canadian wireless bills was a key part of Prime Minister Justin Trudeau's 2019 reelection platform. In March, Trudeau made good on that promise, requiring telecom operators in the country to reduce their charges by 25% over the next two years.

As rival DirecTV Now continues to stagger after abruptly ending steep promotional discounts, Sling TV has announced its own significant price cut.

Dish Network’s virtual MVPD will offer the two iterations of its platform, Sling Orange and Sling Blue, for $15 a month for the first three months, which is a 40% discount. Both packages are available combined for $25 a month, which is $15 better than the regular $40 price.

After shifting around 500,000 customers who were paying as little as $10 a month for DirecTV Now service last year, operator AT&T reported the loss of 267,000 DirecTV Now customers in the fourth quarter.

For its part, Sling TV saw narrowed growth in 2018, down to around 208,000 customers from estimated 2017 additions of more than 2017, the latter according to analysts estimates. The platform grew by only 50,000 customers in the fourth quarter.

Related: Sling TV Adds 50K Subscribers in Q4

A sign-up discount will further erode Dish’s average revenue per customer (ARPU), which is already falling at a rapid pace with low-margin Sling TV customers replacing more profitable linear subscribers in the dwindling Dish customer base.

Pay TV average revenue per user (ARPU) dropped from $86.43 for Dish in 2017 to $85.46 last year. In 2016, the operator’s pay TV ARPU was $88.66.

With studies suggesting that Netflix could lose a sizable portion of its subscriber base with a price increase announced a week earlier, Hulu announced that it’s going to significantly reduce the monthly price of its base tier.

The media company, a joint venture between three publicly traded media conglomerates, said that starting in February, it will lower the cost of its base subscription video-on-demand service from $7.99 to $5.99.

“This may be the shrewdest move I’ve seen, and I’ve been covering this space for 15 years,” said Michael Greeson, who runs The Diffusion Group, a research firm focused on the OTT market.

Hulu’s base service gives users full access to its full VOD streaming library, but does require customers to watch commercials. Importantly, it now costs $3 a month less than Netflix’s base tier, which delivers a one standard definition stream per household and was recently bumped up to $8.99 a month.

“That’s a prima facia value play, positioning ad-based Hulu on the lowest end of the pricing spectrum,” Greeson said. “Since the company continues to significantly trail Netflix and Amazon Prime Video in subscribers, Hulu really had nothing to lose here and much to gain. If Netflix is a no-brainer at the new $9/month, Hulu makes even more sense at $6/month."

Related: Netflix Loses 8% of Consumers with $1 Price Increase: Study

Hulu didn’t offer official comment with its announcement. But behind the scenes, its decision-makers concede that previous $5.99 promotional offers for their base tier have goosed sign-ups. An even bigger driver, company officials say, is the higher engagement and retention rates wrought by these $5.99 promos. 

Perhaps confusing and diluting Hulu’s media strategy, the joint venture also said that it’s raising packages that bundle its SVOD library with virtual pay TV live-streamed services. The version of Hulu+ Live TV that requires users to watch ads during SVOD streams went up $5 to $44.99 a month; the iteration with no SVOD adds also went up $5 a month to $50.99.

But given the state of the ultra-competitive, low-margin subscription-based vMVPD business, where every operator is losing money on every customer they sign up, and rising program licensing costs have made $5 bumps almost routine, “+ Live TV” subscriptions may not be a category Hulu is interested in growing right now.

For his part, Greeson—who pegs Hulu+ Live TV’s subscriber base at around 1.6 million—doesn’t believe the price increase will hurt the business all that much.

“No doubt consumers see solid value in the offering, and we saw ample pricing headroom at $40/month,” he told MCN. “Given recent reporting of Hulu’s continuing losses, it makes all the more sense to take advantage of this headroom and increase prices at this point in time."

But ad-supported streaming (AVOD) is hot, hot, hot right now, evidenced at least to some degree by Viacom’s $340 million purchase of AVOD platform Pluto TV.

There’s a general consensus that has settled into the OTT market that consumers are becoming price-sensitive about video subscriptions. Notably, The Diffusion Group surveyed broadband users in December—a month before Netflix raised prices—and asked them what they would do if the No. 1 SVOD service became more expensive.

For a then-hypothetical $1-a-month price increase, 8% said they’d bolt Netflix.

For Hulu, which touts 25 million subscribers compared to 139 million globally for Netflix, advanced advertising may be a better way to compete. The joint venture said earlier this month that it took in nearly $1.5 billion in ad revenue in 2018 — which was probably welcomed news to majority shareholder Disney, which said its $580 million in equity investments last year were primarily earmarked to Hulu.

For its part, Hulu is championing a notion that there’s an emerging Generation Z audience running back to advertising, seeking relief from paywalls, a decade after their millennial forebears shunned commercials in video services.

Speaking at CES earlier this month, Hulu CMO Kelly Campbell said Hulu is seeing a less rejection of adverting from younger viewers, who are willing to sit through commercials to avoid subscriber fees they can’t yet pay for.

“Gen-Zers think differently about TV,” Campbell said. “They’re more receptive to advertising. They’ve grown up in this IP-powered universe, and they’re used to targeted advertising.”

Hulu has issued a number of key prices changes, just a week after the leader in the subscription streaming market, Netflix, also announced price increases.

Notably, the prices of the service’s stand-alone subscription video-on-demand services (SVOD) are not going up in price. In fact, they’re going down, with the core SVOD platform, which includes commercials, reduced from $7.99 to $5.99 a month.

However, bundles that include Hulu’s virtual pay-TV platform are increasing in price.

Related: Hulu Letting Subscribers Know About Price Changes

Hulu+ Live TV, which includes more than 60 live channels in addition to access with commercials to its entire VOD library, is going up $5 to $44.99 a month. The version of that bundle with no ads is also going up $5 to $50.99 a month.

The pricing changes will take effect in late February. 

An individual with knowledge of the company’s pricing strategy said Hulu believes it can goose SVOD subscriptions with the price reduction, given the performance of previous $5.99 promotions on the core platform.

Hulu is decreasing the price on its basic SVOD service just as market leader Netflix announced across-the-board monthly service spikes.

The $5 price increase on virtual MVPD service follows very similar moves last year by most competitors in the headed vMVPD category. 

The Federal Trade Commission has charged DirecTV with deceptively advertising discounted 12-month packages of service, suggesting its "ditch cable" campaign also ditched some of the facts.  DirecTV says the FTC is "flat out wrong."

FTC said DirecTV, in asking consumers to ditch cable and switch to DirecTV (notably those Rob Lowe ads where cable is portrayed as creepy and unseemly), failed to disclose that the 12-month package requires a two-year commitment. The FTC alleged the satellite operator was tricking consumers into making the switch.

It also said DirecTV did not disclose that the cost of "up to $19.95" pricing in the offer goes up by as much as  $45 per month in the second year.

"DIRECTV also fails to disclose that its offer of free premium channels for three months is in fact a negative option continuity plan that requires consumers to proactively cancel to avoid automatic charges on their credit or debit cards, the FTC alleged in its complaint.

Jessica Rich, director of the FTC's Consumer Protection bureau, said consumers were not able to make an informed choice because DirecTV did not give it to them.

"The companies tell consumers to ditch cable and switch to DirecTV to save money" with ads promoting low prices for 12 months, she said, but instead it "tricked" consumers into buying satellite TV packages with a 24-month commitment, with "drastic" price escalations in the second 12 months and early cancellation fee of up to $480 dollars.

"Companies can't hide important information from consumers to trick them into buying goods and services, and that's what we allege DirecTV did."

“DIRECTV misled consumers about the cost of its satellite television services and cancellation fees,” said FTC Chairwoman Edith Ramirez in a statement. “DIRECTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed. It’s a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print.”

"The FTC's decision is flat-out wrong and we will vigorously defend ourselves, for as long as it takes," DirecTV said in a statement. "We go above and beyond to ensure that every new customer receives all the information they need, multiple times, to make informed and intelligent decisions. For us to do anything less just doesn't make sense."

The FTC is seeking a court order permanently barring DIRECTV from engaging in the allegedly illegal conduct, as well as a monetary judgment to refund consumers.

While a reporter on a conference call about the action pointed to some fine print on the DirecTV web site citing the 24-month contract, the FTC said some fine print disclosures did not trump the larger claims it said were meant to decieve.

The FTC did not set a figure on the monetary element--which will be determined in litigation--but said a ballpark fiogure would be in the many millions of dollars, including consumers who went ahead and paid he escalating price of $25-$45-per-month more in the second year, or those who paid the cancellation fee.

The complaint was lodged in the U.S. District Court for the Northern District of California, San Francisco Division. The vote to approve the complaint was 5-0.

The FTC has filed a complaint against DirecTV in the past over alleged do not call violations, and is currently in litigation with Dish for telemarketing and do not call violations.

Consumers Union applauded the FTC's move, taking the opportunity to tweak the satellite operator over its TV ad campaign.

“You can just imagine the TV ad: ‘I’m Rob Lowe, and here’s the price you’ll pay for DirecTV. And I’m Hidden-in-the-Fine-Print Rob Lowe, and we’re actually going to jack up your bill," said Delara Derakhshani, policy counsel for Consumers Union.

“DirecTV tells you you'll pay a certain price, without being upfront about the big price hike and the two-year commitment in store for you.   You can’t get out of the deal without paying hefty penalties.  This was not an isolated incident. The FTC complaint details how these problems with DirecTV have been cropping up for years."

“We’re glad the FTC is going after these kinds of deceptive and misleading offers."