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Broadcasting & Cable
Broadcasting & Cable
Business
Daniel Frankel

Get Ready for Another Netflix Price Hike This Year, Analyst Says

Netflix's Japan Office.

UBS analyst John Hodulik is taking Netflix at its word, after the company last month rather overtly signaled further upcoming prices increases during its fourth-quarter earnings report. 

“We expect to see rate increases this year," Hodulik wrote in an investor note on Tuesday, which was first reported on by the Penske showbiz trades

With ad sales and subscribers continuing to ramp up, Netflix's revenue growth for 2024 could reach 15% vs. 7% in 2023, the analyst suggested. Netflix's own guidance for Q1 revenue growth is 13.2%.

In its Q4 letter to shareholders last month, Netflix used some fairly overt language about upcoming price changes. 

"We seek to provide a range of prices and plans to meet a wide range of needs, including highly competitive starting prices," the company stated. "As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service."

During the company's earnings call, Co-CEO Greg Peters said Netflix held off on price increases over the past few years while it dealt with the account sharing issue. That was a form of "substitute price increase," he explained. "Now that we’re through that, we’re able to resume our sort of standard approach toward price increases."

Netflix announced its last domestic price increases just last October, eliminating its ad-free "Basic" tier and increasing its 4K-capable "Premium" plan to $22.99. "Basic with Ads" stayed flat at $6.99 a month, and the ad-free "Standard" tier remained at $15.49 a month. However, with ad-free Basic gone, that effectively amounted to a price increase for the millions of single users seeking an ad-free Netflix experience and who had previously been paying only $9.99 a month for it. 

Prior to that, Netflix also jacked prices up in January 2022, taking the Standard tier from $13.99 - $15.49, and Premium from $17.99 - $19.99.

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