Netflix is raising subscription prices across various tiers following a record gain of 19 million new subscribers in Q4. The ad-supported tier will increase to $7.99 from $6.99, while the popular Standard plan will rise to $17.99 from $15.49. The Premium plan will move up by $2 to $24.99. Although consumers might resist rising costs, the company aims to improve profit margins and enhance value through these increases, believing that most subscribers will remain despite typical near-term cancellations post-increase.
As we continue to invest in programming and deliver more value for our members, we will occasionally ask our members to pay a little more so that we can re-invest to further improve Netflix.
While consumers are leery of any more inflation, especially in the price-hike-happy streaming business, the financial world has long seen significant opportunity for the company to boost its profit margins by raising prices.
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