There appears to be another Netflix price increase just around the corner. Wall Street analysts are expecting Netflix to raise prices across its streaming service in 2024, first reported by Variety.
“We expect to see rate increases this year,” said UBS analyst John Hodulik about Netflix in a research note on Tuesday, seen by Variety. UBS says the expected price hike and ad revenue could push Netflix’s revenue growth to 15% in 2024, roughly double what it was in 2023.
Netflix raised prices for its Basic plan from $US9.99 to $US11.99 just a few months ago, but it seems another price hike is on the horizon. The company appears to be on a mission to extract more value out of its current subscribers.
The streamer cracked down on password sharing for much of 2023. Just last month, Netflix killed off its Basic plan altogether in Canada and the U.K., leaving customers with the $US15.49 Standard plan as the next cheapest ad-free option.
So far, subscribers have not been leaving Netflix due to price increases in the U.S. and overseas.
“Those changes went well, better than we forecasted,” said Co-CEO Greg Peters on Netflix’s earnings call last month. Now Netflix is testing how much it can increase those prices.
UBS expects healthy subscriber growth from Netflix this year, but streaming services as a whole have been struggling to attract new customers. In 2023, subscriber growth fell from 21.6% to 10.1% across streaming services, according to a report from research firm Antenna. That’s why many streamers are now asking you to pay more or watch advertisements.
Because of this shift, UBS analysts see Netflix as the “main beneficiary of structural changes in media.” Analysts expect that Netflix will be able to increase prices and retain subscribers more than other streaming services, because of its large premium library and dedicated following.
The price hikes are part of our new era in streaming. For the last decade, Netflix has focused on growing its subscriber base as much as possible. However, now it’s large enough that it needs to become solidly profitable. For the consumer, that means higher prices, more ads, and probably less original content from Netflix. The golden era of streaming may be coming to a close.
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