Batten down the hatches, subscribers! Brace for more Netflix price hikes in the near future, as the streaming giant has shared plans to monetize the platform further, potentially asking members to shell out more cash for the service.
What Happened: Netflix Inc.’s NFLX plans to further hike prices might excite investors while existing subscribers have more bad news to deal with after a price hike in October.
The dreaded guidance for potential price hikes was buried in Netflix’s letter to shareholders after the fourth quarter results.
“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.”
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Netflix beat the Street’s expectations, reporting a fourth-quarter revenue of $8.83 billion, ahead of the consensus of $8.72 billion, according to Benzinga Pro data.
It added 13.12 million net paying subscribers during the quarter, but its average revenue per member remained almost flat. Netflix said this was due to “limited price increases over the last 18 months.”
Now, it looks like the company is gearing up to change that.
While it’s not clear if these price hikes are imminent, Netflix has already moved to end the “Basic” ad-free plan that costs $11.99 per month. New subscriptions for this plan were shut down in 2023, but the plan itself is being phased out.
Netflix started with the U.K. and Canada in the second quarter of this year, but the company stopped short of explaining what options will be given to users currently on these plans. So far, it has allowed existing subscribers to keep their subscriptions until their expiry.
For context, the “Basic” plan has not been available in the U.S. since at least July.
‘Thrilled’ With Password Sharing Crackdown
Netflix’s co-CEO, Ted Sarandos, also shared excitement about the progress of the company’s password sharing crackdown.
The company said in its letter that “many millions of our members are now taking advantage” of the “Profile Transfer” feature that was rolled out in July.
“Paid sharing is our normal course of business — creating a much bigger base from which we can grow and enabling us to more effectively penetrate the near-term addressable market of ~500M connected TV households.”
Besides, Netflix also thinks “Games… is a huge opportunity,” more so after the success of the Grand Theft Auto trilogy on the streaming service.
The company will also bring World Wrestling Entertainment on its platform in 2025 in a $5 billion deal as it looks to attract subscribers.
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