Netflix also wants to become the newest member of the rarefied $1 trillion valuation club. Fellow tech luminaries like Apple and NVIDIA have already reached this prestigious milestone. The streaming service has continued to take the entertainment sector by storm. Now, it’s—by all accounts—suddenly looking at big subscription price hikes to raise the revenue needed to hit its financial targets.
This request for such a high valuation very much follows the footsteps of Netflix’s dramatic subscription increases. Like all good monopolies, the company is raising its subscription prices. Earlier this year, the company unilaterally raised subscription prices. If the latter is adopted, it would result in the Premium tier increasing by up to 16 percent by 2025. At a time when many streaming platforms are looking for ways to improve their content offerings, this strategy is consistent with that popular move.
The Competitive Landscape
Make no mistake, Netflix is aiming high. It’s up against some serious competition from Disney+, the third biggest streaming platform. Over the course of the last year, Disney+ dramatically increased prices on existing subscribers. From starter to primo costs, including bundled tier combo deals, they didn’t dictate a monthly charge. These changes reflect a growing industry trend where multiple streaming services are raising prices to support expanded content libraries and keep pace with consumer demand.
That war Netflix vs Disney+ continues to rage, as the two streaming titans compete for audience and subscriber dollars. While Netflix aims to stabilize its user base with predictable price increases, Disney+ continues to innovate and adapt its offerings in response to market demands.
Future Price Increases
Netflix recently announced a new plan to continue to raise prices incrementally over the next five years. Their aim is to roll out an initial regular price increase that would last through 2030. This long-term focused approach seeks to address increasing infrastructure and content creation costs. The company knows that viewers have a passion for unique, quality programming. Consequently, streaming platforms will incur increasing costs.
Netflix’s content strategy is key for the company to continue succeeding in today’s competitive landscape. By guaranteeing price increases, the company hopes to reassure its investors and stakeholders of its commitment to growth and profitability.
