UBS analysts are predicting Netflix will raise streaming plan prices in 2024, according to Variety. This price hike prediction follows announcements made alongside the company’s fourth-quarter results in January, which hinted at such incremental increases in Netflix’s subscription plans.
We expect to see rate increases [from Netflix] this year, UBS analyst John Hodulik said, pointing to the potential for a 15% revenue growth in 2024. Last October, Netflix raised the Basic plan’s price from $9.99 to $11.99 per month in the United States, alongside similar hikes in the UK and France. Netflix hasn’t officially announced specific plans to hike subscription prices in 2024, but execs have said rate increases are on the table.
On the Q4 2023 earnings call, Netflix co-CEO Greg Peters acknowledged the company had largely put price increases on hold while it was rolling out a paid-sharing program after it removed the ability to share accounts. 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 US, UK and France. Those changes went well better than we forecasted.
Peters added that Netflix 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, citing successful past increases.
The analyst firm also noted Nielsen data showing Netflix’s US TV viewing share rose to 7.9% in January 2024, up from 7.7% in December. Netflix has strong pricing power compared to rivals, with lower average prices per hour: 30 cents for ad-free tiers, versus 56 cents for Hulu, 58 cents for Peacock, 73 cents for Disney+, and 81 cents for both Max and Paramount+.
UBS also increased its estimates for Netflix’s net subscriber additions in 2024, projecting continued momentum in subscriber trends, with an anticipated growth of 20 million subscribers.
Before October, Netflix previously increased its prices in January 2022 and discontinued access to the $9.99 Basic ad-free plan for new and returning users in July. This change required all users to pay more, even if their sole aim was to avoid ads.
