Netflix set to hike subscription prices, new report predicts
According to industry analysts, Netflix fans are about to suffer at the hands of the streaming giant yet again – as another price hike is just around the corner.
The world’s number one streaming service is due to release its Q3 2024 earnings report on October 17th, and the numbers are expected to be solid. However, subscriber growth has dwindled in the wake of the password crackdown from earlier in the year, after an initial surge in people signing up for their own accounts instead of password sharing. For this reason, Wall Street predicts an effort will be made to claw back some of the shortfall.
On October 15th, New Street Research analyst Dan Salmon noted his belief that there exists “the potential for a major price increase announcement, including the U.S.” He also theorised that any price increase could be “broader” than the last one from October, 2023, which only upped the cost of two of Netflix’s tiers.
At that point, the Basic Netflix plan went up to $11.99, while the Premium service was increased to $22.99; however, the ad-supported and standard tiers stayed at $6.99 and $15.49. In UK terms, that meant Basic was priced at £7.99 and Premium £17.99. Salmon believed this “partially helped differentiate the lower price point of the ads plan as initial adoption was ramping.”
Benjamin Swinburne, an analyst from Morgan Stanley, also predicts “continued price increases” on Netflix’s premium plans because the company aims to boost its average revenue per member (ARM) figures in the coming year. The investment bank and financial services company forecast ARM growth of 4% in 2025 “on ad-free subscribers as continued price increases help offset downward pressure from regional mix shift.”
What is Netflix’s view on price increases?
Netflix has always been upfront and transparent with consumers about why it needs to increase its prices periodically. For example, as part of its Q2 earnings call in July, co-CEO Greg Peters explained, “It’s our job to increase the value that we are delivering all of our members.”
Peters continued, “We’ve got more amazing film, more series, the live events that are coming, more games. And when we have signals from our members, this is the amount of acquisition that we’ve got going on, engagement, what our retention and churn looks like, then we find the right moment to ask our members to pay a bit more to keep that flywheel spinning.”