There is a non-zero chance that Netflix will raise prices again in multiple countries later this year.
The prediction comes via a group of analysts from Swiss finance company UBS Securities, telling people to “expect interest rate increases” due to a changing entertainment ecosystem. They mention, among other things, how the platform’s total U.S. viewership increased from 7.7 percent to 7.9 percent in January 2024. Moreover, as time goes on, traditional media companies are increasingly shifting to streaming services. Companies will look to manage their libraries, reduce production spend and focus more on ‘content licensing’ to better consolidate their platforms.
Netflix in particular is in a prime position to benefit from the changing landscape, suggesting the company may feel confident enough to raise prices another time. After all, they have a collection of acclaimed shows, movies, and a diverse range of video games. Any additional revenue from the price increase, in addition to the revenue ad-supported tier and subscriber growth, could boost the company’s revenue by 15 percent.
Possible price increase
Granted, this is just one group of analysts making these claims. As far as we can tell, no one else is making a similar prediction, nor has Netflix made a formal announcement of any upcoming changes.
However, there are good reasons to believe that this will happen. Variety points to a fourth-quarter 2023 earnings call in which Netflix co-CEO Greg Peters said the service has “largely suspended price increases” while it rolled out the “paid sharing program.” He was apparently referring to the Extra Member option being implemented in 2023. But now that the program is over, Netflix wants to resume its “standard approach to price increases.”
Of course, this move could blow up in their faces. Subscribers were able to leave en masse. Although, as Peters notes, the recent big price increase “went better than (they) predicted.”
Analysis: Overconfident?
You have to ask yourself, “is Netflix justified in its confidence or is it overconfident?” It could just be the first. Despite all the outrage on the internet, the platform saw a lot of growth when it started cracking down on passwords and introduced ad-supported tiers. UBS Securities said Netflix “added a net 29.5 million new subscribers in 2023.” This move was and will likely continue to be a big success, with analysts predicting higher-than-expected cash flows well into 2027.
There’s a chance that a new walk could be the straw that breaks the camel’s back. Viewers may cancel their subscriptions en masse due to rising costs, but that remains to be seen. Take this information with a grain of salt. It’s all speculation at this point.
If you’re looking for a new way to enjoy movies, check out Ny Breaking’s roundup of the best TVs for 2024.