There is a non-zero percentage that Netflix will raise prices again in several countries later this year.
The prediction comes from a group of analysts at Swiss financial company UBS Securities, who tell people to “expect to see fee increases” due to a changing entertainment ecosystem. Among other factors, they cite how the platform's total US audience increased from 7.7 percent to 7.9 percent in January 2024. What's more, traditional media companies are leaning more toward bespoke streaming services that time advances. Companies will strive to curate their libraries, cut production spending, 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 that the company may feel confident enough to raise prices at a later time. After all, they have a collection of praised shows, movies, and a wide range of video games. All the additional revenue from the price increase along with the level of advertising-supported revenue and subscriber growth could increase the company's revenue by 15 percent.
Possible price increase
Of course, this is just a group of analysts making these claims. As far as we know, no one else is making a similar prediction nor has Netflix made a formal announcement of the upcoming changes.
However, there are good reasons to believe this will happen. Variety notes a fourth-quarter 2023 earnings conference call in which Netflix co-CEO Greg Peters said the service had “largely halted price increases” while launching the “pay-sharing program.” He was apparently referring to the additional member option implemented in 2023. But now that the program is over, Netflix is looking to resume its “standard approach to price increases.”
Of course, this move could blow up in their faces. Subscribers could leave in droves. Although, as Peters points out, the recent big price increase was “better than [they] predicted.”
Analysis: Too confident?
One might ask: “Is Netflix’s confidence justified, or is it overconfident?” It may simply be the former. Despite all the outcry on the internet, the platform saw huge growth when it started cracking down on passwords and introduced ad-supported tiers. UBS Securities says Netflix “added 29.5 million net new subscribers in 2023.” The move was and will likely continue to be a big success, with analysts predicting higher-than-expected cash flow well into 2027.
There is a chance that another walk will be the final straw. Viewers may cancel their subscriptions en masse citing rising costs, but that remains to be seen. Take this information with a grain of salt. It's all speculation at the moment.
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