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The Netflix Pricing Wars

After a decade of phenomenal growth based on a single offering, a content bazooka, and an indifference to password sharing, Netflix’s next theater of growth all comes down to nailing multiple price points—including a possible free tier—and deploying its vaunted algorithms across the spectrum.

Netflix co-C.E.O. Ted Sarandos said he was “open to all different models that are out there right now."
Netflix co-C.E.O. Ted Sarandos said he was “open to all different models that are out there right now." Photo: Hollywood To You/Star Max/GC Images
Julia Alexander
July 28, 2023

Hollywood analysts, myself included, spent much of the past week poring over Netflix earnings—noting, for example, that the average revenue per member (ARM) slipped three percent year-over-year, which helped explain why the stock dropped eight percent (alongside weaker revenue guidance). But that’s not the real story about Netflix. As the company implemented its password crackdown this quarter, C.F.O. Spencer Neumann said it made the deliberate decision not to raise prices again across its various tiers. At least not yet.