Survey respondents can be all talk, he said. “If Netflix’s research shows that they will lose one-third of their premium subscribers on a $1 monthly price increase, they would be unlikely to implement the price increase.”Ĭolin Dixon of nScreenMedia also doesn’t see a third (or more) of Netflix users bailing after the next price increase. “Similar to prior years in which they instituted a price increase, (Netflix) would not do so without careful analysis in order to limit churn,” Reese told IndieWire. So that’s not going to happen it’s just what could happen with the wrong execution. If an instant 35-39 percent chunk of churn sounds astronomical, it would be devastating to Netflix. (No offense to CivicScience this is just how it works.) The streamer is regularly doing more market research on its own users than a one-off CivicScience survey. Netflix, a data-driven company itself, knows this. And what the CivicScience survey “doesn’t adequately address,” per Wedbush Securities analyst Alicia Reese, “is the precise price elasticity of its users.” A lump sum of users may indeed scrap Netflix at a $5 monthly increase, but probably not for a dollar or two. Not all price hikes are equal, of course. Netflix is “discussing raising prices in several markets globally,” WSJ wrote, “but will likely begin with the U.S. In July, during its Q2 2023 earnings call, Netflix CFO Spencer Adam Neumann said that the writers' and actors' strikes could add some "lumpiness" to Netflix's cash flow from 2023 through 2024.įrequent changes in streaming services' prices, combo packages, and content have turned cord-cutting into a complicated, pricey endeavor that's reminiscent of cable.Measuring Applause at the Oscar Nominations Luncheon The WGA believes its new contract equates to 0.2 percent ($68 million) of Netflix's annual revenue ($31.6 billion). As noted by The Verge, streaming services like Netflix will be required to share performance metrics with writers and increase writer residuals. Netflix's reported upcoming price rise could also help the company manage incoming costs associated with its agreements with writers and actors. In May, Netflix president of worldwide advertising Jeremi Gorman said Netflix's ad tier has "nearly" 5 million monthly active users, per The Hollywood Reporter. Bumping up the prices of its ad-free plan could be beneficial for Netflix by generating more revenue from ad-free users and by pushing people to its ad tier. Discovery, have pointed to its ad-supported tiers generating higher average revenue per user than ad-free tiers. The company also cracked down on password sharing, charging $7.99 per month for each user outside the main household.Īs noted by WSJ today, Netflix, as well as streaming rivals Disney and Warner Bros. Netflix also introduced an ad plan ($6.99 per month) this year and got rid of its mid-tier, ad-free Basic plan (making the lowest price for ad-free Netflix $15.49 per month instead of $9.99 per month). A price hike is one obvious way to attempt to do that. AdvertisementĪs subscriber numbers stagnate, though, Netflix has been looking for other ways to increase revenue. Those prices look a lot different from Netflix's debut monthly pricing ($7.99 or $11.99 for 4K). Netflix's last price increase was in January 2022, when its ad-free standard plan went from $14 to $15.49 per month, and its 4K plan went from $18 to $20 per month. A similar move from Netflix would follow the broader streaming industry's trend of jacking up prices. Today, Discovery+ announced that it's increasing prices for its ad-free tier from $6.99 to $8.99 per month, effective immediately. The Writers Guild of America (WGA) is voting on a tentative agreement with TV and movie studios this week, while the Screen Actors Guild is undergoing negotiations. Netflix declined to comment to the Journal. A representative for Netflix could not immediately be reached by Ars Technica for comment. WSJ couldn't confirm how much prices will increase or when the increases will start. WSJ said "people familiar with the matter" informed it that Netflix will probably launch its price hike in the US and Canada. However, the price bump reportedly won't come for "a few months," as Netflix is waiting for the actors' and writers' strike to formally end, the publication said. Netflix, one of the only profitable TV streaming services ( along with Hulu), is reportedly planning on increasing the monthly price of its ad-free subscription, The Wall Street Journal reported today.
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