It attracts lower-income customers, stems the practice of using other people's passwords and adds a new pricing lever by increasing ad loads rather than raising subscription, Martin said. 'This price differential will cause lower subscriber growth than we had previously expected.' In the least, he added, the competition 'will constrain Netflix's ability to raise prices without inducing greater churn.' Millions of subscribers in playĪ new $5–$7-per-month pricing tier, subsidized with ads, is the best option for Netflix, she said. 'Customers are more price-sensitive than previously thought, and competitors like Disney+ are already undercutting Netflix's prices,' wrote Morningstar equity analyst Neil Macker in a recent report. There's a compelling case for price tweaks as a way for Netflix to keep and add consumers and stave off lower-priced rival services that are scrambling to peel away its customers. The competition will continue to increase, with advertising-funded Peacock from Comcast's NBCUniversal and HBO Max from AT&T's WarnerMedia set to stream into the market this spring. Netflix conceded slowing membership growth in North America was a result of last year's price hike and growing competition in its backyard.

As it spends heavily on original content - up to $15 billion annually - the future of Netflix pricing models is an issue that appears to be growing with each passing quarter.

Netflix price