Is another Netflix price hike on its way? After the streaming giant raised the price of its premium plan in the fall, it seems unlikely. But the company kept the door open with some sly language deep in its fourth-quarter letter to shareholders.
“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,” Netflix said after reporting its year-end results.
While that isn’t confirmation that a price increase is definitely coming, it’s a worrisome comment considering the last year we’ve had, where virtually every pay-TV provider and streaming service raised their rates, citing the cost of programming and distribution deals. Relatively speaking, Netflix’s own price increase, which only affected its premium tier and marked the revival of its standard plan at a higher rate, was pretty modest.
Its ad tier remained at $6.99 a month, the same price its been since launching at the end of 2022.
In other words, it’s due for an increase.
Netflix Chief Financial Officer Spencer Neumann was unhelpfully vague on the company’s quarterly earnings conference call on Tuesday, saying that he doesn’t see a change to its pricing philosophy. He expects to see revenue growth from adding new members and from its newly launched advertising tier, but declined to comment on any projections for ARM, or its “average revenue per member,” which would be a key indicator of whether he expects people to spend more via a price hike.
The company expects to see double-digit revenue growth for the full year. Time will tell if some of that growth will come from higher rates for everyone.
Image credit: Netflix (Money Heist)