Mar. 30 at 2:49 PM
Why did
$NFLX impose a price increase across US plans?
1) More content spend - eyes
$20B in FY26 [up +10% y/y]
2) Protect margins
3) Rev/hour is lower than competitors at
$0.48/hour
Even w/ new price increases, Netflix will still have a sector-low rev/hour viewed metric (about
$0.50/hour range)
Note: Netflix’s competitors have also recently hiked prices;
$DIS + & Hulu, HBO Max &
$CMCSA NBCUniversal’s Peacock upped pricing last year, &
$PSKY Paramount+ raised prices in Jan. Next month,
$AMZN ad-free Prime Video tier (now called “Ultra”) is going up
Netflix standard & premium plan go up by
$2/month but the ad tier by only
$1/month - In theory, Netflix is agnostic about which plan someone chooses: The ad revs should make up the difference in sub fees
A wide gap b/n its highest & lowest tiers to simultaneously maximize monetization of its least price-sensitive subs while nudging more price-sensitive custs toward its ad tier, driving engagement &, in turn, ad revs
