Netflix is continuing to flex as hard as ever as the streamer giant records yet another tremendous run of its unstoppable growth. Amidst the latest turn of events, it seems to be aiming at yet another incredible win-win situation as the streamer’s stock price recorded an even higher number on Friday. This has been somewhat boosted by breakout shows, but not entirely.
That said, this event can’t entirely be credited to Millie Bobby Brown’s all-time best and confoundingly successful thriller Stranger Things series. As it turns out, the real, hard reason behind this spurge of growth is something that will end up hurting all subscribers of the subscription video-on-demand over-the-top streaming service: An incoming price hike. Yikes.
Netflix Stock Price Rise to be Followed by a Price Hike for Subscribers?
According to exclusive reports, the streamer’s NFLX stock showed no signs of slowing down as it jumped more than 10% higher than before on Friday. This has pushed the shares to be placed at a fresh record of around $760. The reason behind this growth is being cited as the streaming giant’s tough revenue initiatives like its crackdown on password sharing and ad-supported tier.
While the platform has been receiving a strong and steady flow of subscribers as another 5 million+ people were added amidst the breakout of pieces like The Perfect Couple and Nobody Wants This, Millie Bobby Brown‘s Stranger Things might as well be credited for being a helping hand. This has inevitably contributed to the peaking stock rates, yes, but of course: That’s not all.
With the recent turn of events, Yahoo! Finance reports that analysts are now expecting another price hike incoming for the ever-increasing subscribers. Previous hikes of the streamer’s Standard plans came in January 2022, when the monthly cost was raised from $13.99 to $15.49. But the real blow came for the Premium tier, which went from $19.99 to straight $22.99 in October 2023.
As per Citi analyst Jason Bazinet, these numbers just may be up to rise even further: “Given Netflix’s low cost per viewed hour, we see scope for the firm to raise US prices by 12% in 2025.”
Besides the previous price hike, the lowest-priced ad-free streaming plan was also replaced with the Standard one, and the only plan that currently remains unaffected and the cheapest of them all is the ad-supported one, which stands at $6.99 a month as of this writing.
These reports are further fueled by the fact that Netflix has some major pieces that are scheduled to be released soon. This includes upcoming releases like Squid Games season 2, the Jake Paul vs. Mike Tyson fight, as well as the two NFL games scheduled for Christmas.
These have led the company to expect even higher net additions in the fourth quarter than the third one of 2024, as more subscribers are expected to pile in.
Meanwhile, Netflix is Also Focusing on its Advertising Business
On the one hand, the price hike seems inevitable amidst the streamer’s raging stock market growth. But it’s further pulling some really clever tricks up its sleeve as the company reveals more advertising focus for it in the near future. To say the least, they aim to make ads “a more substantial revenue stream that contributes to sustained, healthy revenue growth in 2025 and beyond.”
“We continue to build our advertising business and improve our offering for advertisers,” the subscription video-on-demand over-the-top streaming service offering company said in the earnings release. “Ads membership was up 35% quarter on quarter, and our ad tech platform is on track to launch in Canada in Q4 and more broadly in 2025.”
It’s worth noting that the company’s revenue for this third quarter hit $9.83 billion as opposed to the $9.78 billion estimated by Bloomberg consensus. Moreover, the streaming giant is further guided to a fourth-quarter revenue of $10.13 billion, beating the consensus estimates of $10.01 billion. Needless to say, that’s some serious growth for the streamer.
Nonetheless, even with its constantly growing market, it seems like Netflix has taken the “the more, the merrier” phrase a bit too seriously in terms of the price of those subscription plans that grant it its big bucks – something that is expected to soon be hurting all subscribers.
