Netflix raises its US prices for its basic plan from $9.99 to $11.99, its premium plan from $19.99 to $22.99, and some of its prices in the UK and France
Hollywood strikes will lead to lower content spending, more free cash flow this year, company says — Netflix said its efforts …
Wall Street JournalJessica Toonkel
Context & Ripple Effects
This follows an early-October report that Netflix was preparing to raise its ad-free offering after the actors’ strike ended, a plan now reflected in its new US, UK and French price changes.
The move extends a recurring pricing pattern: Netflix had already lifted standard and premium prices in 2020, while leaving its entry plan unchanged at that time. The current increase reaches both the basic and premium ends of the US lineup.
First-order effects
US basic subscribers face a $2 monthly increase, while premium subscribers face a $3 increase; some customers in the UK and France also see higher bills.
Netflix gains more revenue per affected subscription while it says Hollywood strikes are reducing content spending and increasing free cash flow this year.
Second-order effects
The wider gap between Netflix tiers makes plan selection more consequential for households, potentially concentrating demand in lower-cost options or prompting cancellations among price-sensitive users.
Other streaming services must weigh whether Netflix’s move creates room for their own price increases or makes price positioning a sharper competitive tool.
Third-order effects
Repeated increases suggest streaming economics are shifting from subscriber-led expansion toward extracting more value from established subscriber bases, with retention becoming the constraint on pricing power.
If this pattern persists, subscription bundles may face greater churn and substitution pressure as households reassess overlapping services—a form of bundle cannibalization rather than simple platform-by-platform competition.
The trend: Streaming services are testing how far mature subscription audiences will tolerate higher recurring prices as growth and content economics become more disciplined.
#Netflix just hiked the price for its premium service by 15% to $22.99 per month. Before the 2020 pandemic the price was just $15.99 per month. That's a 44% increase in three years, or close to 15% per year. That's much closer to the real rate of #inflation than the official CPI.
Netflix said its efforts to limit password sharing delivered stronger customer growth than expected in the third quarter, and it announced plans to increase some prices in the U.S., U.K. and France https://www.wsj.com/...
Here comes another Netflix price hike. Subscribers to Netflix's Basic and Premium plans will be paying more, with prices rising to $11.99 and $22.99 per month in the US.
Interesting summary from $NFLX: “Since 2016, when we launched our service globally, we've been able to invest heavily in our slate (with content amortization up ~3X from $5B to ~$14.5B a year) while steadily increasing Netflix's operating margin (up 5X, from 4% to 20%) and... [im…
I genuinely would appreciate it more if streaming executives said, “We don't want to show our hand” when asked. I get why they don't. But, really...it would be more believable than some of these claims.
$NFLX on paid sharing: “The cancel reaction continues to be low, exceeding our expectations, and borrower households converting into full-paying memberships are demonstrating healthy retention. As a result, we're revenue positive in every region...” +9.5% AH [image]
Netflix forecast — We forecast Q4'23 revenue of $8.7B, up 11% year-over-year, or 12% on an F/X neutral basis. For the fourth quarter, we expect paid net additions will be similar to Q3'23 (+/- a few million).
In part because the strike is limiting content spend this year, Netflix now expects FY23 free cash flow to be approximately $6.5B (+/- a few hundred million dollars), up from prior forecast of at least $5B, and vs. $1.6B in 2022.
Some detail on how the Netflix ad-tier is doing — “In Q3'23, our ads membership increased nearly 70% quarter-over-quarter and now accounts for ~30% of all new sign-ups in our 12 ads countries.”
Netflix: People just want most of what they want in one place. We have a projected $6.5 billion in FCF and are increasing content spend in 2024. We will continue investing in originals, but we will gladly take shows your companies can't hold onto — and make them hits for us. [ima…