If you’re still adjusting to Netflix’s most recent price hike, don’t get too comfortable as the cost of the streaming service could be set to increase before the end of the year.
While Netflix itself has not indicated that a price hike is on the horizon, analysts at UBS Securities (reported by Variety) suggest that Netflix will increase the price of its streaming plans in 2024 in order to “accelerate its revenue and earnings growth.” In a research paper released this week, UBS's John Hodulik said, “We expect to see rate increases this year.”
The analyst firm predicts that another price hike would see Netflix’s total revenue increase from 7% in 2023 to around 15% in 2024. This jump would undoubtedly please shareholders, but it makes for less enjoyable reading for the average Netflix viewer who will be lumped with a larger bill each month.
The last Netflix price increase is likely still relatively fresh in many subscribers' minds. Back in October of 2023, the streamer hiked its Basic plan from $9.99 up to $11.99 a month. The Premium plan also increased, hitting a fairly sizeable $22.99 a month. That price increase represented a 15% rise from its former price of $19.99.
Similar increases were seen in the U.K. with the Basic tier jumping from £6.99 to £7.99 per month, and Premium increasing by £2 going from £15.99 per month to £17.99. Furthermore, the final quarter of 2023 saw Netflix price hikes in additional regions including France and Australia.
Netflix's last price increase 'went well'
It’s important to stress that for now, a new Netflix price increase is purely speculative, but if I were a betting man, I’d say the odds of further hikes look relatively strong as Netflix has indicated it didn’t experience significant pushback to its previous increase in late 2023.
During the company’s most recent investor call, Netflix co-CEO Greg Peters claimed that the most recent price increases “went well” and the results were “better than we forecasted.” This could be an indication that Netflix is feeling bullish when it comes to future price hikes.
In the same call, Peters also commented on Netflix’s password-sharing crackdown which came into effect last summer. The streaming executive claimed the company viewed it as “a form of substitute price increase” and because of it “largely put price increases on hold” — although as we know, that hold didn’t last long as by October of 2023 prices were increasing.
Peters also noted that now that the password-sharing crackdown had been rolled out and the company was “completely satisfied” with the results, Netflix would resume its “standard approach towards price increases.” This certainly suggests that a fresh price hike is on the table, but, for now, Netflix has not confirmed an increase.
Analysis: The increasingly high cost of Netflix
Netflix continues to be one of the very best streaming services around, offering a large library of binge-worthy TV shows and must-see movies. It’s also the streamer most capable of creating content that captures the cultural zeitgeist and getting social media abuzz with conversation.
In many households, a Netflix subscription is viewed as an essential utility, but while many subscribers will tolerate another price increase, everybody has a breaking point, and there’s always a possibility that Netflix will eventually hit a tipping point if it keeps pushing up prices.
The company’s streak of canceling well-received shows and focusing on areas that don’t seem to be gaining traction (*cough* gaming *cough*), has also dented Netflix’s reputation in recent years. Yes, the password-sharing crackdown was unpopular. But as I can personally attest, it was effective, and Netflix is now reaping the benefits.
For Netflix to continue to hold its dominant position in the streaming wars, it will need to carefully balance price increases with delivering quality content that excites subscribers. For now, it seems to be getting that balance right, but it's a difficult tightrope to walk, and further price increases could be a step too far for some.
Just don’t be surprised if the streamer attempts to pair future price increases with new seasons of its most popular show. Perhaps a fresh price hike will arrive ahead of Stranger Things 5 ….
