Netflix Price Increase In 2020? Here’s What Analysts Predict Might Happen

Netflix last increased its prices in May 2019 with the cost per month for its Standard and Premium plans upped by $2 each in the U.S. Now, analysts are predicting that another price hike could hit the service’s massive userbase in U.S. or Europe very soon.

Alex Giaimo of Jeffries made the prediction based on the change in language the company used between its first-quarter and second-quarter earnings calls in 2020.

“After a change in language regarding pricing on the (second-quarter) call, we believe a potential hike is probable in the near to midterm,” Giaimo explained in a recent note. “In Q1, Netflix said that they were ‘not even thinking about price increases,’ while the Q2 language was more open-ended.”

While nothing is official from Netflix’s end, Giaimo predicted that the increase could be a fairly standard $1-2 per month, Deadline reports. With the service’s current subscriber base, a $2 per month increase could generate up to $1 billion in extra revenue during the 2021 fiscal year.

It remains to be seen if and when this increase will come to pass. Based on Giaimo’s rationale, consumers and analysts may get a better sense based on the language Netflix uses to discuss the possibility during its Q3 earnings report, which is due on Oct. 20.

While price hikes always cause consternation and angry tweets among subscribers, Giaimo believes that the service’s content library is deep enough for it to weather any storm.

“We have confidence that Netflix can raise prices in international markets given its deepening content library and outsized consumer value proposition,” the analyst wrote.

Netflix, and video streaming platforms in general, have faired very well during the coronavirus pandemic with consumers hungry for movies and shows while stuck at home. Netflix is reported to have added 26 million subscribers globally during the first half of 2020, for a world-conquering total of 193 million.