In this photo taken in Krakow, Poland, on June 8, 2023, the Netflix logo is seen on a phone screen and its website is seen on a laptop screen.
Jakub Porzycki | Nurfoto | fake images
Prepare to pay more money for Netflix.
You had to read all the way to page six of Netflix's letter to shareholders to find it. But there it was. A dreaded phrase for price-conscious consumers. A big round of applause for investors.
“As we invest in and improve Netflix, we occasionally ask our members to pay a little more to reflect those improvements, which in turn helps drive the positive flow of additional investments to further improve and grow our service,” he said. the company to investors. .
Netflix launched its advertising tier in November 2022 as it cracked down on password sharing to give users a cheaper way to access content from the world's largest streamer. So far, not many people have signed up. Netflix announced earlier this month that it has 23 million monthly active users on its advertising tier. This could mean between 12 million and 15 million paying subscribers, estimated Evercore ISI analyst Mark Mahaney.
Netflix has more than 260 million global subscribers after adding 13.1 million in the fourth quarter, the company's biggest addition in the fourth quarter.
The bottom line for Netflix executives may be that most of their audience is happy to pay what Netflix charges. A standard Netflix subscription in the US currently costs $15.49 per month. The ad tier costs $6.99 per month, the same price it launched at in 2022.
On Tuesday, Netflix announced that WWE's Raw would be coming to the service in 2025. It's Netflix's biggest foray into live entertainment yet. Netflix is paying more than $5 billion for 10 years of Raw.
With more content, Netflix can have leverage to convince its users that they should pay more money. The company said it plans to increase its content amortization by a “high single-digit percentage year over year,” according to its letter to shareholders.
disney plans to launch ESPN direct-to-consumer later this year or in 2025. That product will likely cost much more than Netflix. That will also give the company cover to raise prices, as consumers may see Netflix as an even better value proposition compared to competing streaming services.
Netflix did not announce a price increase in its quarterly letter or say when it would occur.
But rest assured: it is coming.
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