While Netflix was busy rolling out paid account-sharing options last year, the streaming giant also scaled back the price increases it would have liked to implement. That's because, according to company co-CEO Greg Peters, "we saw (paid sharing) as a form of substitute price increase." Now that those account-sharing options are in place, though, I bet you can't guess what's going to happen next.
Continued Peters, during Netflix's most recent quarterly earnings presentation: "Now that we're through that, we're able to resume our sort of standard approach toward price increases." And, in fact, analysts at UBS Securities published a research note today that includes their forecast of at least one Netflix price increase sometime this year. "We expect to see rate increases this year," reads the Feb. 27 research note from UBS analysts led by John Hodulik, with those price hikes coming as part of larger structural changes taking place at media companies.
"The new playbook," the UBS analysts continue, "includes 1) price increases, 2) platform consolidation, 3) library curation (with attendant asset write-downs), 4) cuts to content spending (adjusting for strike-related declines in 2023) and 5) a renewed focus on content licensing."
The last time Netflix raised prices came in October 2023, following the end of the Hollywood writers' strike. The Basic plan, no longer available to new subscribers, got hiked by $2 to $11.99. The Premium plan price increased by $3 to $22.99, while the price of the two other plans remained the same (the Standard with ads and Standard plans both remained at $6.99 and $15.49, respectively). Those price increases, by the way, also came a little under two years after the prior increase, which was back in January of 2022.
For Netflix, the only way these inexorable hikes work is if customers by and large continue to feel they're getting good value for money. And, of course, there's no one-size-fits-all answer to that question. For some, the steady clip of new shows and movies added each week is the perk that keeps them happy. For others, the cancellation of a favorite show -- or the perception that there's getting to be too much fluff in the library -- can put them on the fence or even tip them over into cancelling.
As for what's still to come to the streamer content-wise later this year, subscribers are getting dozens of major new shows including new seasons of Bridgerton, Squid Game, and The Diplomat, as well as new movies that include Zack Snyder’s Rebel Moon – Part Two: The Scargiver, Eddie Murphy’s long-awaited return as Axel Foley in Beverly Hills Cop: Axel F, and Hit Man, in which Glen Powell stars as a fake hitman working for the police.
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Another Netflix price increase is coming this year, analysts forecast originally appeared on BGR.com on Tue, 27 Feb 2024 at 15:16:00 EDT. Please see our terms for use of feeds.
