Netflix has made some major changes to its subscriptions in recent months.
Between the addition of an ad-supported subscription tier, crackdown on account sharing, and the elimination of a classic subscription option, many consumers have found that their monthly investment in Netflix has changed.
Will things settle down now that all of these changes have been implemented? Or will we be in for even more changes in 2023?
A recent statement by Netflix’s Chief Financial Officer, Spencer Neumann, may provide the necessary insight.
Netflix CFO Says Pricing Should Remain the Same in 2023
During the company’s 2023 second quarter earning call, Neumann addressed the near-term future of pricing for Netflix in the United States.
“We’re more than a year out on any price adjustments in our big revenue countries,” Neumann said. “We largely paused them during the paid sharing rollout.”
Good news! That presumably means that we’ll likely see subscription prices remain the same until at least sometime in mid-2024.
In case you’ve missed it through all the recent headlines, customers now have three subscription options:
- Standard with ads ($6.99 per month)
- Standard ($15.49 per month)
- Premium ($19.99 per month)
Subscribers to the Standard and Premium packages have the option to add “extra members” for $7.99 per person per month. These out-of-household subscribers get their own login and password, but the bill is paid by the main account holder. (This is a new policy to retain customers who were sharing passwords.)
You can get a better idea of what each subscription package offers via this graphic from Netflix:
Why Are Netflix Prices Likely to Remain Unchanged Until 2024?
In a world of “price hike” headlines for most video streaming services, it’s somewhat surprising to hear a CFO say his company is at least a year away from considering another price increase.
You may be wondering why he’s able to say this so confidently. Netflix customers can mostly thank the new account sharing policy for this cost certainty.
“Most of our revenue growth this year is through growth in [subscriber] volume through new paid memberships,” Neumann explained. “And that’s largely driven by our paid sharing rollout. It’s our primary revenue accelerator in the year, and we expect that impact to build over several [financial] quarters.
Another reason Netflix may be able to maintain pricing stability is the projected revenue growth that advertisers could provide via the ad-supported subscription tier.
“Ads are a new revenue stream,” Neumann said. “We’ve expected a gradual build. That’s not expected to be a big contributor this year, but it continues to be on target.”
After some months of uncertainty around the pricing and availability of subscription tiers, Netflix customers can settle in with one of the three available subscription tiers.
While it remains a “top shelf” brand in the world of video on-demand streaming, Netflix’s current pricing structure allows it to reach a variety of customers.
The $6.99 ad-supported tier allows Netflix to compete with value streaming services, such as Peacock and Paramount+, on the lower end of the subscription spectrum. It also places them as slightly cheaper than the monthly price for Disney+.
And for those who value the Premium experience, the $19.99 per month plan still packs a punch with which many streaming services simply can’t compete.
Which Netflix subscription tier do you enjoy? We’d love to hear your thoughts in the Clark.com community.