Higher prices remain a possibility as Netflix invests in live programming, short-form video, games and other new entertainment offerings.
Dubai: Netflix subscribers could see further price increases in the future as the streaming giant looks to sustain revenue growth while ramping up investment in live broadcasts, short-form content, gaming and other emerging entertainment formats.
Netflix did not announce any new subscription price increases alongside its second-quarter results, and there is no indication of an immediate hike. However, the company said its recent price increases had performed as expected, suggesting that pricing remains a potential lever for future revenue growth.
Netflix reported net profit of $3.4 billion for the April–June quarter, up more than 9% from $3.13 billion a year earlier, while revenue rose 13% to $12.56 billion from $11.08 billion.
Revenue came in slightly below analysts’ expectations of $12.58 billion, while earnings per share of 80 cents edged one cent above forecasts.
Netflix shares fell by as much as 8% after the company forecast slower revenue growth for the current quarter.
Will Netflix subscription prices increase?
A subscription price cut appears unlikely under Netflix’s current strategy, although the company has not announced any immediate price increase.
Netflix expects pricing, subscriber growth and advertising to remain key drivers of revenue in 2026. The company has also identified pricing as one of the factors supporting its full-year growth outlook.
Netflix has previously said subscription rates may be adjusted when it expands its content and features or in response to inflation, taxes and local market conditions. Customers are notified before any price changes take effect.
The outlook suggests subscription prices are likely to remain stable in the near term, with selective price increases more likely than broad reductions over time. Any future changes are expected to vary by country and subscription plan, as Netflix’s pricing and billing policies differ across markets.
Whether Netflix raises prices will also depend on its ability to keep subscribers engaged through new programmes and features. Consumers may become less willing to accept higher monthly fees as competition intensifies from rival streaming platforms and free short-form video services.
Slower growth unsettles investors
Netflix expects third-quarter revenue to grow by around 12%, falling short of the approximately 13% increase forecast by analysts, a weaker outlook that weighed on investor sentiment.
Second-quarter revenue growth of 13.4% was Netflix’s slowest in nearly three years, raising concerns that the company may struggle to maintain the stronger growth rates seen previously.
Netflix no longer publishes regular subscriber figures, which were once the primary measure of its performance. Instead, the company said viewers watched 97 billion hours of content during the first half of the year, up 2% from the same period last year.
The relatively modest increase in viewing hours has drawn attention as Netflix competes for audiences with platforms such as YouTube, TikTok and other entertainment services.
Despite the slower growth, Netflix said it still sees significant opportunities to expand its global business.
What could change for future programmes?
Netflix is expanding beyond its traditional mix of films and television series, meaning subscribers can expect a wider variety of content formats within the same app.
The strategy includes adding more live sports and entertainment, short-form videos, podcasts and interactive games alongside its existing library of movies and TV shows.
From August 3, subscribers in the US, Canada, the UK, Ireland, Australia and New Zealand will gain access to videos as short as two minutes under licensing agreements with publishers including Penske Media, BuzzFeed Studios, Condé Nast, Hearst Magazines and People Inc.
Netflix has not announced when the short-form video offering will be introduced in the UAE or other international markets.
Live events included for now
Netflix said live events are currently included across all subscription plans at no additional cost, according to its support information. The company has not announced any changes to live-event rights packages or subscription tiers.
Advertising plays a bigger role
Netflix expects its advertising business to generate around $3 billion this year, making its lower-priced ad-supported plan an increasingly important part of its growth strategy.
Stronger advertising revenue could reduce the need for frequent subscription price increases, particularly for customers who choose to watch ads. It may also encourage Netflix to invest more in programming that attracts large live audiences, such as sports, concerts and reality shows.
The ad-supported subscription plan, launched in 2022, offers a lower-cost option, although Netflix does not provide a free tier. Subscribers can upgrade, downgrade or cancel their plans online at any time.
Strong demand from advertisers gives Netflix another avenue to grow revenue without relying solely on higher subscription fees. However, if viewer engagement weakens, the company could face greater pressure on pricing, advertising revenue and the success of its newer content formats.
Live events gain momentum
Netflix said it continues to see strong demand for live programming, including the Women’s World Cup.
The company added that a live performance by K-pop group BTS attracted more than 18 million viewers in March, while the success of “KPop Demon Hunters” continued to boost its animated content lineup.
Netflix said “Swapped” is on track to become its second most-watched original animated film, behind “KPop Demon Hunters.”
Other popular titles during the quarter included Harlan Coben’s “I Will Find You,” the British series “Legends,” South Africa’s “The Polygamist,” and the Korean drama “Teach You a Lesson.”
The company is also expanding its use of large language models (LLMs) and voice-based features to improve content discovery, allowing subscribers to search for programmes using natural language descriptions rather than specific titles or genres.
