Will Netflix raise prices again? Analysts think so

The question of whether Netflix plans to raise the price of its streaming subscriptions in the future has been raised again in the approach to its soon-to-be-released third-quarter results.

Netflix subscribers in the US pay a $6.99 monthly fee for its ad-supported plan, while the standard and premium tiers are $15.49 and $22.99 per month. Both these plans are ad-free.

The streaming giant's most recent increase came in the fall of last year, when U.S. customers saw the price of the discontinued basic plan go up and the price of the premium tier go up. The cost of that Netflix subscription rose in the UK and France at the same time.

Oppenheimer & Co. A research note dated October 9 said it expects “a premium price increase for other regions, and more importantly an 8%-15% increase in the standard plan”.

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The firm's Jason Helfstein said the price of the standard plan has been flat since January 2022, when Netflix raised $1.50 in the US.

“In January 2022, the NFLX standard plan was priced at a 53% premium to peers, now it's 4%. Meanwhile, the plans are 18%/9%/3% cheaper than Hulu/Max/Disney+ in the US,” he notes. , based on historical averages, a 15% increase represents a 23% discount on premium plans.”

“A strong 3Q viewing and 4Q content slate, including the NFL, should further reduce the risk of churn,” Helfstein added.

The Netflix logo is displayed on a mobile phone screen in a background image with the Netflix website. Krakow, Poland on January 23, 2023. (Beata Zawrzel/Nur Photo via Getty Images/Getty Images)

Oppenheimer, factoring in potential growth, increased its fourth-quarter and fiscal 2025 average revenue per member by 2%.

Tim Nolen, senior media tech analyst at Macquarie US Equity Research, raised his price target for Netflix on Friday, saying in a research note that he is “confident in its advertising levels over the long term, buoyed by sports and potential price increases.” The note offers insight into media technology companies ahead of third-quarter earnings.

Analysts suggested that a potential increase for American consumers could be in the pipeline.

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“We think Netflix boasts strong pricing power as it hasn't raised prices at standard levels since Jan '22 – both Hulu and Max are now more expensive than Netflix standard,” Macquarie's research note said. “Netflix may also be buffered against churn because it boasts the lowest-priced video streaming service at $6.99 with ads, illustrating its strong value for money.”

Fox Business has reached out to Netflix for comment.

Netflix executives have told analysts and investors that it looks at signals like member acquisition, engagement and retention when deciding whether to raise its subscription fees.

Earlier this year, co-CEO Gregory Peters said that Netflix viewed its password-sharing crackdown as an “opportunity price increase” and did not raise subscription prices during the rollout of that initiative.

BRAZIL – 2023/12/05: In this photo image, the Netflix logo is displayed on a smartphone screen. (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images/Getty Images)

Netflix last year began seriously limiting Netflix account sharing between “family members,” causing people outside the family to either get their own separate memberships or become “additional members” to the account they're already using.

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“Extra members” cost extra – $7.99 per month in the US – and gave the streaming giant a subscriber and revenue boost.

“We offer a variety of price points so consumers can select a plan that best fits their situation and needs,” the company says on its website. “Additionally, we adjust pricing periodically because it allows us to invest in services to better serve our members. We test different pricing approaches (including different plans and price points) to better understand consumer needs.”

Netflix and its content platform are available in more than 190 countries around the world.