On Thursday, Netflix Inc. (NASDAQ:NFLX) said its U.S. pricing still delivers superior value even after the latest hikes raised some concerns, arguing subscribers pay less per hour of viewing than rival streaming platforms.
Netflix Defends Price Hikes As Value Strategy
During the company’s first-quarter earnings call, Netflix co-CEO Gregory Peters said that the latest U.S. price increases were long planned.
“This change was part of our plan for some time,” Peters said. He added that Netflix tracks “quality-weighted engagement, plan selection, plan moves, and retention” before making pricing decisions.
Peters noted that the company raises prices only after delivering more value, noting, “Our pricing philosophy is consistent.”
Engagement And Retention Stay Strong After Price Increase
Netflix executives said early indicators suggest the latest price hikes are not driving users away. CFO Spencer Neumann pointed to improved retention across all regions.
“We saw stronger retention across the board this quarter,” Neumann said, adding that engagement reached record levels in both the fourth quarter of 2025 and the first quarter of 2026.
According to the company, these trends are consistent with past price increases, where subscriber behavior remained stable.
Lowest Cost Per Hour Versus Rival Streamers
Peters argued that Netflix remains competitively priced despite higher subscription fees.
“In the United States right now, Netflix, Inc. subscribers are paying the least per hour of viewing compared to other SVOD offerings,” he said, adding that competing services can cost up to “two times per hour” for similar usage.
The company also highlighted its ad-supported tier, now priced at $8.99 per month, as an accessible entry point for users.
Price Hikes Follow Content Investment Push
In March 2026, Netflix raised U.S. prices for the second time in just over a year, increasing all three plans by at least $1 as it ramps up spending on original content and live programming.
The move follows a prior hike in early 2025—the first increase to the standard plan in three years, historically its most popular tier.
The latest pricing changes come weeks after Netflix walked away from a deal for Warner Bros. Discovery (NASDAQ:WBD), opting not to counter Paramount Skydance’s (NASDAQ:PSKY) $31-per-share bid.
After WBD terminated the agreement, Netflix received a $2.8 billion breakup fee.
Netflix reported first-quarter revenue of $12.25 billion, topping analyst estimates of $12.18 billion. The company also posted earnings of $1.23 per share, well above expectations of 76 cents per share.
Price Action: After-hours trading saw Netflix shares fall 9.60% to $97.44, after closing at $107.79, up 0.074%, on Thursday, according to Benzinga Pro.
NFLX ranks in the 93rd percentile for Growth on Benzinga Edge, suggesting strong short and mid-term trends but relatively weaker long-term performance.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Mijansk786 on Shutterstock.com
Recent Comments