Netflix will report its summer-quarter earnings on Thursday, when media analysts expect an announcement that you’re really, really not going to like.
In a note sent to his clients (and obtained by IndieWire), Evercore ISI analyst Mark Mahaney forecast a Netflix price hike “in the next 3-9 months.”
A Netflix spokesperson did not respond to IndieWire’s request for comment on this story.
Though Mahaney’s forecast offers a bit more specificity than most, it is not exactly a bold prediction. The last Netflix monthly price increase came exactly one year ago, and that one was a “success,” LightShed Partners analyst Rich Greenfield wrote on Wednesday.
We’re due, and we know it. (It’s become common for streamers to raise their rates on a regular cycle: Disney+ increased its monthly price in October 2024, just like it did in October 2023. Paramount+ prefers June increases.)
You and I may not like this inevitability, but NFLX holders will.
“Investors are likely to need to see evidence of pricing leverage in 2025 to make up for slowing account growth,” Andrew Marok wrote in his note to Raymond James clients. They don’t necessarily need to make a move right away, he wrote, but without much room left for subscriber growth, especially in the U.S. and Canada, Netflix will “need to show some progress into early 2025.”
Everyone’s out here hedging on the timeline, but they’re all reaching the same conclusion: It’s a matter of time before your bill goes up. Well, maybe not for those with the lowest monthly bills.
Members on Netflix’s ad-supported tier were spared the price hikes the last time around — a “surgical” maneuver, Wedbush analyst Alicia Reese told IndieWire. She expects the same strategy to continue if and when Netflix raises rates again — whenever that is.
The ad-supported tier today costs $6.99/month, and in theory that will stay put. The most popular plan today is $15.49/month, but maybe not for long. (Reese is less convinced than others that we’ll get another Netflix price-hike announcement in another Q3 shareholder letter.)
Netflix, like other mature streamers, is pushing users to its ad-supported tier (though not as aggressively as Amazon Prime Video). Ad sales only add up at scale, and even the mighty Netflix has not gotten there — yet. (Maybe don’t spend your first decade publicly swearing off commercials?)
A subscription service’s average revenue per user (ARPU — what Netflix calls ARM, or average revenue per member) can be higher on its ad-supported tier than the ad-free one(s). If Netflix shareholders want to see their NFLX shares near $800 apiece, a new and significant revenue stream needs to emerge.
The great Netflix comeback was closely tied to its password-sharing crackdown. The resulting revenue surge is just about over; Reese and her Wedbush colleagues predict that Netflix’s advertising tier will “become the primary growth driver in 2026.”
Shortly after the 4 p.m. ET release of Netflix’s Q3 earnings (and the potential price-increase announcement), media analysts will have an opportunity to participate in a Q&A with senior Netflix leadership. General earnings-call etiquette states that you limit yourself to one question and one followup; Rich Greenfield has nine.
On Wednesday, Greenfield posted his full list of queries for co-CEOs Ted Sarandos and Greg Peters (and a few other execs). Number 1: “Will there be a 2024 price increase?”
It’s the number 1 question on our minds too, Rich.
