Even beyond the eye-catching 300 million subscriber benchmark, Netflix’s Q4 numbers are quite impressive under the hood. Netflix reported that, accounting for “extra member accounts,” its global audience could be as high as 700 million. Its net income for the period was $1.87 billion, up nearly a full billion dollars from the same period last year. One prominent analyst described the streamer’s latest earnings as “near flawless,” while the company’s stocks surged 100%.
Markets are perpetually in search of the financial unicorn that can unlock the “infinite growth” cheat code, and Netflix suddenly seems as good a candidate as any. As its technology and entertainment competitors flounder under the weight of poor management (Meta), questionable product gambits (also Meta), and close ties to an unpopular incoming administration promising tariffs (again: Meta), Netflix feels as though it’s built for the long haul more than ever. The whole world is a Blockbuster just waiting to get bankrupted.
Of course, what’s best for Wall Street isn’t always what’s best for the consumer. And tucked into Netflix’s good-time earnings bonanza was news of across-the-board price hikes. The streamer announced the following changes:
– The standard plan (with ads) moves from $6.99 to $7.99.
– The standard plan (without ads) moves from $15.49 to $17.99 per month, representing the first price increase at this level in three years.
– The premium plan, with four simultaneous streams, moves from $22.99 to $24.99 per month.
– The cost of adding an additional member to any plan moves from $7.99 to $8.99.
The price increase of the ad-supported plan is sure to be particularly disappointing for some, as it represents the first time Netflix has increased that model and suggests that a further blending of ad and subscription costs could be in the company’s long-term plans. To explain the changes, Netflix wrote to investors that: “As we continue to invest in programming and deliver more value for our members, we will occasionally ask our members to pay a little more so that we can re-invest to further improve Netflix.”
It’s not reasonable to expect a streamer’s prices to remain the same in perpetuity, especially as it adds additional content and, in theory, value. That’s not even to mention the global uptick in the inflation rate following the COVID-19 pandemic response. But Netflix’s latest price increases seem more closely associated with its ascendance as the streaming war winner than they do with the financial reality on the ground. One Redditor notes that the premium plan’s price increased by 108% over the span of 10 years while the global inflation rate over the same time frame was 33%.
