Netflix Price Hike Expected Later This Year

Summary

• Netflix is planning to raise subscription prices in 2024 to drive revenue growth and accelerate earnings, according to UBS analysts.
• Despite previous price hikes, Netflix remains a better value compared to other major streaming platforms in terms of price per hour of consumption.
• The streaming giant is expected to increase net subscribers and partner with big Hollywood names for major releases in 2024, as it continues to grow.

The streaming giant Netflix is expected to raise its subscription prices again this year, according to a new report from analysts at UBS Securities (via Variety). The move towards a price hike is being planned in the name of accelerating “its revenue and earnings growth,” with the report stating that such a move will “push Netflix’s total revenue growth in 2024 to 15%,” up from 7% in 2023.

“We expect to see rate increases this year,” the analysts at UBS led by John Hodulik said.

Moving away from dry percentages and business analysis for a moment, Netflix raised the price of their ‘Basic’ subscription back in October, with the price going from $9.99 to $11.99 per month in the United States, alongside upping costs in both the United Kingdom and France. While Netflix has not officially announced further price hikes, the UBS report notes that such a move would align the streaming platform with the plan in place across the industry and the push towards “profitability in streaming.”

“The new playbook includes 1) price increases, 2) platform consolidation, 3) library curation (with attendant asset write-downs), 4) cuts to content spending (adjusting for strike-related declines in 2023) and 5) a renewed focus on content licensing.”

Will Higher Netflix Prices Be Worth It?

Despite criticism regarding content and the rush to cancelation that Netflix has suffered in recent years, the analysis cites Nielsen data, which shows that Netflix’s share of TV viewing in the U.S. went up in January 2024 , rising to 7.9% from 7.7% at the end of last year.

Netflix is also one of the best value streamers in the growing market, when compared to other major platforms. According to the UBS report, Netflix subscriptions are, on average, lower than others, with the “price per hour of consumption” standing at around 30 cents/hour on Netflix, against 56 cents/hour for Hulu, 58 cents/hour for Peacock, 73 cents/hour for Disney+, and 81 cents/hour for both Max and Paramount+.

“As the objective in streaming shifts from subscriber growth to profitability for the traditional media companies, we see Netflix as the ultimate beneficiary of this industry rationalization,” the UBS analysts say in the report.

Related The 60 Best TV Shows Streaming on Netflix Right Now Let us be your personal Netflix curators so you can find the kind of shows you’ll wish lasted twice as long but can’t wait to start over, once again!

Netflix is also expected to increase their net subscribers, with the UBS estimate being adjusted from 18 million to 20 million in 2024 “to reflect continued momentum in subscriber trends, upside to [average revenue per membership] and higher operating leverage.” For context, Netflix added 29.5 million net subscribers in 2023, up from an annual average of 21 million in 2020-22.

“While we expect net adds to slow, we believe Netflix still has significant runway as it continues to convert users to paid subs and attracts new cohorts,” the report reads.

The streamer continues to collaborate with some of the biggest names in Hollywood. This year sees the release of such major movies as Back in Action with Jamie Foxx and Cameron Diaz, Carry-On with Taron Egerton and Jason Bateman, Damsel starring Stranger Things’ Millie Bobby Brown, the critically acclaimed Hit Man starring Glen Powell, Rebel Moon Part 2: The Scargiver from director Zack Snyder, and Beverly Hills Cop: Axel F, which sees Eddie Murphy return to one of his most iconic roles.

And that’s without mentioning such serial projects as Avatar: The Last Airbender, Bridgerton season 3, Ripley starring Andrew Scott, 3 Body Problem, Black Doves, The Diplomat season 2, Emily in Paris season 4, The Gentlemen, Cobra Kai season 6, and many more.

But will a further Netflix price hike be worth it?

You can view the original article HERE.