Netflix binge-watching could soon get even pricier.
It could happen if the streaming giant decides to hike how much it charges for its memberships again and, according to UBS telecom and cable analyst John Hodulik, that may very well be in the cards this year.
UBS "expect[s] to see rate increases this year" that will drive average revenue per membership up by 5% with help from "scaling ad revenues," he said in a recent research note. FOX Business reached out to the company for comment.
Netflix currently has the monthly fees for its ad-free Standard and Premium plans set at $15.49 and $22.99, respectively, for its U.S. subscribers while its Standard with Ads plan costs $6.99. The streaming giant also has a $11.99-per-month Basic tier that it is sunsetting that "is no longer available for new or rejoining members," according to its website.
The basic and premium options reached those cost levels last year in the U.S. after Netflix announced price hikes – $2 for the former and $3 for the latter – back in mid-October, as FOX Business reported at the time. The company rolled out higher prices for those in the U.K. and France too.
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"While we expect net adds to slow, we believe Netflix still has significant runway as it continues to convert users to paid subs and attract new cohorts," Hodulik went on to say in the research note. "This, along with price increases and a ramp in the advertising platform should drive accelerating growth in ‘24 … or 13% CAGR through ‘27."
UBS projected revenues for the streaming giant – a "Buy" in their eyes – could hit 15% growth this year, according to the research note.
About a month prior to the note, Co-CEO Greg Peters told analysts and investors the company "largely put price increases on hold while we were rolling out the paid sharing work because 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 towards price increases," Co-CEO Greg Peters said at the time, adding the company would "continue to then monitor other countries and try to assess when we’ve delivered enough additional entertainment value" to warrant increases.
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The company has previously said that "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’s total subscriber count included 260.28 million people around the world as of the end of the fourth quarter. In the same three month period during the prior year, it was 230.75 million.
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Users of other streaming platforms also saw those subscriptions become more expensive in 2023.
In mid-October, for example, Disney officially upped the per-month charge for its ad-free Disney+ and Hulu standalone subscriptions by $3. The cost of subscribing to the Apple TV+ streaming service also went up by $3 that month after having been $6.99 since October 2022.
