Netflix Holds Firm on US Subscription Prices Amid Industry-Wide Hikes
While its competitors are scrambling to increase their prices, Netflix is taking a different approach. Despite Disney+, Peacock, and others raising their subscription fees this year, Netflix has no plans to follow suit – at least, not yet.
A Focus on Value Over Competition
According to co-CEO Greg Peters, Netflix’s pricing strategy is centered around the value it delivers to its members, rather than keeping pace with its competitors. “We want to have a range of price points,” Peters emphasized during the company’s third-quarter earnings call. “We think that’s healthy.”
Q3 Expectations Exceeded
The streaming giant’s cautious approach hasn’t hindered its growth, however. Netflix added over 5 million new subscribers in the quarter, beating Q3 expectations across the board. The news sent its stock soaring, jumping as much as 5% in after-hours trading and pushing shares closer to their record high of around $730.
Analysts Weigh In
Wall Street analysts believe a price hike could be a significant catalyst for Netflix’s stock in the near term. Citi analyst Jason Bazinet predicts the company could raise US prices by 12% in 2025, citing its low cost per viewed hour. Netflix’s latest biannual viewership report showed subscribers watched over 94 billion hours on the platform from January to June, providing a solid foundation for future price increases.
A History of Price Adjustments
Netflix last raised the price of its Standard plan in January 2022, increasing the monthly cost to $15.49 from $13.99. The Premium tier also saw a $2 hike to $19.99 a month, followed by another increase to $22.99 last October. The company has yet to raise the price of its ad-supported offering, which remains one of the cheapest ad plans among major streaming players at $6.99 a month.
International Expansion
While Netflix is holding firm on US prices, it plans to increase prices in Spain and Italy. The company has already raised prices in countries like Scandinavia and Japan, demonstrating its ability to adapt to local markets.
A Commitment to Consumer Value
Netflix remains committed to offering consumers a range of plan choices, with the right features at the right price point. As Peters emphasized, “We’ll continually try to offer consumers a spread of plan choices… and evaluate that and evolve it based on what we think works.” With its focus on value and accessibility, Netflix is positioning itself for long-term success in an increasingly crowded streaming market.
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