Streaming behemoth Netflix will likely hike its prices this year.
According to Variety, the move will accelerate the network’s earnings and revenue growth.
John Hodulik and other UBS analysts revealed their thoughts in a February 27 research note.
“We expect to see rate increases this year.”
If that happens, the streaming giant’s total revenue growth this year will grow to 15%, compared to last year’s 7% growth.
Last October, Netflix hiked its Basic plan in the US from $9.99 to $11.99 monthly.
The company also hiked its subscription prices in France and the U.K.
Netflix Had Put A Hold On Price Hikes
Netflix co-CEO Greg Peters addressed the price hikes in the company’s Q4 2023 earnings call, noting that it had maintained subscription rates as it rolled out its paid-sharing program.
“Now that we’re through that, we’re able to resume our sort of standard approach toward price increases. And price increases, you’ve seen us do that in the U.S., U.K. and France. Those changes went well better than we forecasted.”
“We will continue to monitor other countries and try and assess… when we’ve delivered enough additional entertainment value” to “ask [customers] to pay a bit more to keep that positive flywheel going and we can invest in more great films, series and games for those members. So, you know, the summary statement might be, ‘Back to business as usual.'”
UBS thinks this is a good time to buy the company’s shares as they raised their 12-month price target on the streaming platform’s shares from $570 to $685 per share.
They also added that Netflix is currently cheaper than other streaming platforms on a per-hour basis.
“As the objective in streaming shifts from subscriber growth to profitability for the traditional media companies, we see Netflix as the ultimate beneficiary of this industry rationalization.”
