- A Netflix price increase is likely coming soon, according to one analyst who follows the company.
- Alex Giaimo of Jefferies thinks it’s “probable” that Netflix institutes a small price increase on subscribers in North America and Europe.
- He thinks the more likely Netflix price increase, however, will fall on Netflix users in Europe, the Middle East, and Africa.
One of the great strengths of Netflix has always been the unparalleled value that the service — the biggest streaming platform in the world, in fact — provides users relative to the price they pay.
That fact has actually never been more clear than it is right now. The streamer has rocked along for the entirety of 2020, with a release schedule that’s remained utterly packed and unbothered by the coronavirus pandemic. In October alone, for example, there will be a whopping 59 new original movies and shows coming to Netflix, including Adam Sandler’s new movie Hubie Halloween on October 7th and The Haunting of Bly Manor on October 9th. Even farther down the line, meanwhile, I’ve got The Crown Season 4 in my sights, having circled its November debut date on my calendar. To be sure, there are now a handful of serious rivals that are playing the same game as Netflix and fighting for the same subscriber dollars, but Netflix has been and remains the dominant streaming service in the world. Which arguably begs a question — how much do you love the service? How important is this particular entertainment option to you? Because at least one analyst thinks that a Netflix price increase is coming, and that the cost of your monthly bill is about to rise very soon.
Analyst Alex Giaimo of Jefferies is forecasting a “probable” Netflix price increase soon in North America as well as Europe. “After a change in language regarding pricing on the (second-quarter) call, we believe a potential hike is probable in the near to midterm,” Giaimo wrote in a note to clients.
“In Q1, Netflix said that they were ‘not even thinking about price increases,’ while the Q2 language was more open-ended.”
Giaimo goes on to explain that a mere $1 to $2 increase in users’ monthly bills in North America or Europe could rake in between $500 million and $1 billion in fiscal 2021 revenue for Netflix. Netflix users in the US, though, don’t fret just yet — Giaimo thinks the “most likely” price increase is going to hit Netflix users in Europe, the Middle East, and Africa.
To a certain extent, there’s nothing surprising about this news at all. Netflix doesn’t sell ads to businesses and insert those into its content, which leaves subscriber fees as its revenue source — a fact that guarantees that users’ monthly bills will slowly but surely continue to rise over time. Speaking of that fact, the last time US subscribers were given a Netflix price increase was back in May of 2019 (which was the fourth such increase since 2010).
The increase back in the spring of 2019 was only nominal, though, taking Netflix’s most popular plan from $11/month to $13/month.
Today, Netflix operates in more than 200 countries. Its subscriber count has stagnated in the US but is still climbing elsewhere. “We have confidence that Netflix can raise prices in international markets given its deepening content library and outsized consumer value proposition,” Giaimo wrote.
Netflix reports its third-quarter earnings less than a month from now, on October 20, and it will be interesting to see if news about a possible price increase comes around that time.