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Tuesday, May 21, 2024

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Is Netflix Planning A Price Hike?

Netflix’s efforts to crack down on password-sharing have likely boosted its subscriber numbers by approximately 6 million during the third quarter. As the only profitable major streaming platform, Netflix has refrained from raising its ad-free prices this year, unlike competitors like Disney. Instead, it has focused on limiting password-sharing outside of households. This move aimed to tap into the over 100 million viewers who use Netflix without subscribing.

This approach has led to Netflix being likened to a utility in many markets. However, one challenge of being considered a utility is how a maturing company can continue to find growth. It’s speculated that Netflix might raise prices after the conclusion of the Hollywood actors’ strike, which would provide an opportunity for such changes.

Netflix has weathered the strike effectively, thanks to its strong international presence and content lineup. Despite a slower start for its ad plan, analysts anticipate that Netflix will raise the prices of its ad-free options in the coming months to encourage more subscribers to choose the ad-supported tier, which generates more revenue per user. So far, many new subscribers who joined after the password crackdown have opted for the ad-free plans.

The standard plan with ads is priced at $6.99 a month, while ad-free plans start at $15.49. Using these strategies, Netflix is expected to double its ad-supported viewership in the next year. It’s likely to show more ads to users over time to catch up with competitors in the streaming industry.

The ad tier is predicted to bring in around $188.1 million in revenue for the third quarter, with an estimated 2.8 million subscriber additions. Overall, Wall Street expects Netflix to report its strongest quarterly subscriber growth for the year. Revenue in the third quarter is anticipated to have risen by 7.7% to $8.54 billion, marking the fastest growth in five quarters, thanks to the success of recent programs like “Sex Education” and “Virgin River.”

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Ruben Jay
Ruben Jay
Ruben Jay is an American broadcaster, media blogger, and podcast host. Currently, Ruben is the President of MultiMediaMouth.com and the executive producer and host of the popular podcasts You’re My Best Friend and ON AIR with Ruben Jay, exclusively on MultiMediaMouth.com. Follow Ruben on Instagram, Twitter, and Tiktok @TheRubenJay.

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