There’s a non-zero percent chance that Netflix will hike prices again in multiple countries later this year.
The prediction comes via a group of analysts from Swiss finance company, UBS Securities, telling people to “expect to see rate increases” due to a shifting entertainment ecosystem. Among other factors, they cite how the platform’s total American viewership rose from 7.7 percent to 7.9 percent in January 2024. What’s more, traditional media companies are shifting more towards streaming services as time moves forward. Businesses 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 shifting landscape, hinting that the company may feel confident enough to raise prices another time. After all, they do have a collection of lauded shows, movies, and a diverse array of video games. All the extra revenue from the price hike alongside the income ad-supported tier and subscriber growth could bump up the company’s revenue by 15 percent.
Possible price hike
Granted, this is only one group of analysts making these claims. As far as we can tell, no one else is making a similar prediction nor has Netflix made a formal announcement of any upcoming changes.
However, there is good reason to believe it will happen. Variety points to a Q4 2023 earnings call where Netflix co-CEO Greg Peters said the service has “largely put price increase on hold” while it rolled out the “paid-sharing program. He was seemingly referring to the Extra Member option implemented in 2023. But now that the program is over, Netflix is looking to resume their “standard approach toward 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 hike went over “better than [they] forecasted.”
Analysis: Overly confident?
One has to wonder, “is Netflix justified in its confidence or is it overconfident?” It may just be the former. Despite all the internet outcry, the platform did see a lot of growth when it began the password crackdown and introduced the ad-supported tiers. UBS Securities states Netflix “added 29.5 million net new subscribers in 2023”. The move was and probably will continue to be a huge success as the analysts predict a larger cash flow than anticipated well into 2027.
There is a chance another hike could be the straw that breaks the camel’s back. Viewers may cancel their subscriptions en masse citing rising costs, but that remains to be seen. Do take this information with a grain of salt. It’s all speculation at the moment.
If you're looking for a new way to enjoy movies, check out TechRadar's collection of the best TVs for 2024.
You might also like
via Hosting & Support
Comments
Post a Comment