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More Netflix Price Hikes Are Likely On The Way

In a letter to shareholders, Netflix has shared some details about its future plans for subscription pricing.


Netflix is likely to continue to incrementally increase the prices of its subscription plans, the streaming giant has shared in a letter to shareholders. The detail was revealed as part of the company's fourth quarter results, where it shared more details on its future plans around monetization.

Overall, Netflix says it aims to provide "a range of prices and plans to meet a wide range of needs" and calls its lower-tier prices "highly competitive." It looks like future price hikes are on the horizon, with Netflix adding: "as we invest in and improve Netflix, we'll occasionally ask our members to pay a little extra to reflect those improvements."

This isn't unexpected, of course, with Netflix having upped its prices multiple times in the last few years, most recently in October last year. The investor letter also speaks on Netflix's plan for ads, which seems to have worked out well for the company since it first introduced ad-supported plans a little over a year ago.

Thanks to Netflix phasing out the ad-free Basic plan for new and returning users, it says 40% of sign-ups are now for ad-supported accounts. It's planning to go further in phasing out Basic accounts too, which will start rolling out in Canada and the UK from Q2 this year, just a few months away.

The last element of monetization that Netflix touches on is account sharing. While some people swore off Netflix after it removed the ability to share accounts across households, the strategy seemed to have worked out well for the company. "We believe we've successfully addressed account sharing," the investor letter says, "ensuring that when people enjoy Netflix they pay for the service too."

Now that password sharing across households is out, Netflix says that "paid sharing is our normal course of business," with the new Extra Member feature requiring account holders to pay an extra fee if someone outside of their household wants to still use the account.

Overall, Netflix has slowly been getting more aggressive on its monetization, with a recent report suggesting that may soon extend to its gaming business, too. While Netflix's library of games are currently ad and microtransaction free, that could be changing soon too.

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