UBS analysts foresee a potential rise in Netflix’s streaming plan fees in 2024, as reported by Variety. This forecast of a price adjustment comes on the heels of indications given alongside the company’s fourth-quarter outcomes in January, suggesting incremental increments to Netflix’s subscription packages.
John Hodulik, an analyst at UBS, remarked, “We expect to see rate increases [from Netflix] this year,” underscoring the possibility of a 15% surge in revenue for 2024.
Last October, Netflix upped the Basic plan’s cost from $9.99 to $11.99 per month in the United States, accompanied by similar adjustments in the UK and France. While Netflix hasn’t formally declared specific intentions to raise subscription fees in 2024, executives have hinted at the prospect of rate hikes.
During the Q4 2023 earnings call, Netflix’s co-CEO Greg Peters acknowledged the company’s temporary pause on implementing price hikes while launching a paid-sharing initiative subsequent to discontinuing account sharing.
Peters commented, “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.”
Additionally, Peters noted that Netflix would “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 past successful price adjustments.
The analyst group also highlighted Nielsen data revealing Netflix’s increased US TV viewing share to 7.9% in January 2024, up from 7.7% in December. Netflix exhibits robust pricing leverage compared to competitors, boasting lower average prices per hour: 30 cents for ad-free tiers, compared to 56 cents for Hulu, 58 cents for Peacock, 73 cents for Disney+, and 81 cents for both Max and Paramount+.
UBS raised its forecasts for Netflix’s net subscriber additions in 2024, anticipating sustained positive trends in subscriber acquisition, with an estimated growth of 20 million subscribers.
Prior to October, Netflix had previously raised prices in January 2022 and discontinued access to the $9.99 Basic ad-free plan for new and returning users in July, necessitating increased payments for all users, even those aiming solely to avoid ads.