After increasing prices in October 2023, Netflix reported it has done far better than it forecasted after the price hike, and it seems the massive streaming platform could be increasing prices again.
Almost in the same way as last quarter, Netflix might be looking to increase prices again after just moving the needle back in October. The reasoning may sound familiar because it is the same reasoning behind the October increase, except that instead of Q3 earnings results pointing to a higher bottom line with a price increase, Netflix has reported that their Q4 earnings results will point to a higher bottom line.
Co-CEO Greg Peters, on the Q4 2023 earnings call (reported by Variety), said, “[We] largely put price increases on hold [during the rollout of the paid-sharing program] because we saw that as a form of substitute price increase. Now that we’re through that, we’re able to resume our sort of standard approach toward price increases. And price increases, you’ve seen us do that in the U.S., U.K. and France. Those changes went well better than we forecasted.”
After increasing prices for basic and premium tiers in October, it appears the streaming giant’s reasoning behind the potential next wave of price hikes could be because they can. Greg Peters then says “We will continue to monitor other countries and try and assess… when we’ve delivered enough additional entertainment value” to “ask [customers] to pay a bit more to keep that positive flywheel going and we can invest in more great films, series and games for those members. So, you know, the summary statement might be, ‘Back to business as usual.’” The Netflix co-CEO is saying the streaming giant is prepping to increase its pricing before they have plans in place to increase the value it gives customers.
What’s interesting is that, according to Google Finance, Netflix stock has soared over 40% since the initial price hike was instituted in October. As of January, the AP reports Netflix has over 260 million subscribers globally, this is the same month that Netflix made the massive $5 billion deal with TKO media, to have WWE’s flagship show, Monday Night Raw streamed directly from the platform. This deal goes into effect in January 2025. While it seems Netflix is on a trajectory to continue making billions, for 2024, it seems the streaming giant may elect to slam users with a price hike anyway.
