Netflix will “evolve” its pricing model but loves “the low price” of its $6.99 ad plan

Netflix (NFLX) doesn't yet plan to increase its subscription prices in the U.S., although streamers from Disney+ to Peacock are all increasing their respective prices this year.

“We try to think about our pricing, not relative to the competition, but based on the value we provide to our members,” Netflix co-CEO Greg Peters said Thursday during its third-quarter earnings call of the company. “We want to have a price range. We think that’s healthy.”

The company exceeded third-quarter expectations across the board, adding another 5 million-plus subscribers in the quarter. The stock rose as much as 5% in after-hours trading, bringing shares even closer to their record high of around $730.

Wall Street analysts have noted that a price increase would be a positive catalyst for the stock in the near term, especially after the latest semi-annual viewership report showed that subscribers watched over 94 billion hours on the platform from January to June.

“Given Netflix's low cost per hour viewed, we see room for the company to increase U.S. prices by 12% in 2025,” Citi analyst Jason Bazinet said in a note to clients ahead of the report.

Netflix last increased the price of its Standard plan in January 2022, increasing the monthly cost from $13.99 to $15.49. At the same time, the price of the Premium tier was increased by $2 to $19.99 per month; The company increased the cost of this plan again last October to $22.99.

The company recently dropped its cheapest ad-free streaming plan, making the $15.49 Standard plan the cheapest deal for an ad-free experience.

Netflix has not yet increased the price of its ad-supported offering, launched less than two years ago, which remains one of the cheapest advertising plans among all major streaming providers at $6.99 per month.

“We love the low price and increased accessibility that our advertising plan brings,” Peters said. “It represents incredible value.”

Netflix, which has increased the prices of its plans in countries such as Scandinavia and Japan, said Thursday that it plans to increase prices in Spain and Italy as well.

Regarding the US, the company said it will continue to monitor metrics such as engagement, acquisition and retention to determine the best price for consumers.

“We will continually strive to offer consumers a wide choice of plans and the right features at the right price. We will evaluate this and evolve it based on what we think works,” Peters said.

Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and send her an email at [email protected].

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