Netflix Expected to Raise Prices… Again

With virutally all of its competition struggling to make ends meet in a competitive streaming space, Netflix is expected to expand its control of the market this year — and probably to increase its prices to match. That’s according to market analysts from UBS Securities, who say in a new Variety article that they expect Netflix to “take a bigger bite out of overall TV viewing” in 2024. Since this is a theoretical hike, it’s hard to say when or how much it would be, assuming it actually does happen — but the idea of Netflix hiking prices is not exactly new.

Last year, Netflix rolled out its first-ever ad-supported tier, which it can now point to as a lower-cost alternative when users complain about price hikes. More recently, Amazon’s Prime Video incorporated ads into its standard plan, asking fans who wanted an ad-free experience to pay more. In general, streaming seems to be moving toward FAST (free, ad-supported television) models. So, basically, it’s just like when you would record something to your DVR — except now you can’t fast-forward through the ads.

Last October, Netflix increased the price of the Basic plan from $9.99 to $11.99 per month in the U.S. They also hiked prices in some European markets. Per the Variety story, executives at the streamer have not articulated any plans for a rate increase soon, but they have also declined to take the idea off the table.

In June of 2023 — that’s four months prior to the October price increase — the streamer had claimed they didn’t have plans to increase prices again for a year. That’s because in addition to introducing ads, Netflix also rolled out a plan to goose revenue by charging its existing users to share their passwords with family members living outside the main house where Netflix is registered.

Netflix co-CEO Greg Peters said in the company’s Q4 earnings call that “saw that as a form of substitute price increase,” but that now that the program is fully rolled out, they’re going to be more or less back to normal. 

And because this is how things work on Wall Street, UBS characterized the likely price hike as good news, designating Netflix’s stock as a “buy.” They explained that the price hike might not be popular, but will likely be tolerated by the audience, because Netflix is so popular and so widely used that people tend to think they’re getting value for the money. Nielsen data indicated that Netflix’s share of U.S. TV viewing rose to 7.9% in January 2024, up from 7.7% in December of last year.