Netflix has announced a fresh round of price increases for all of its US plans, lifting monthly fees by up to 2 dollars across ad supported and ad free tiers and marking the second hike in just over a year. The move comes as the streamer’s shares hover around 93 dollars and management steers toward an ambitious 2026 revenue target in the low 50 billions.
The company is effectively testing how far it can push average revenue per user without triggering meaningful churn. With guidance calling for 50.7 to 51.7 billion dollars of sales next year, higher prices are set to do a significant part of the heavy lifting alongside subscriber growth and expanding ad revenue.
Standard plan without ads priced at $19.99
The ad-free Standard plan now costs $19.99 per month, an increase of $2 from the previous $17.99. At the same time, the premium plan also increases by $2 to $26.99 per month. The cheapest standard plan with ads increases by $1 to $8.99 per month.
New members will see the new prices starting March 26, while existing subscribers will gradually transition to the new prices over the coming months. Existing members will be notified by email a month before the new prices are applied.
Non-household sharing pricing
Netflix $NFLX is also increasing the cost of adding non-household users at the same time - it now costs $6.99 for plans with ads instead of the original $7.99, and $9.99 instead of $8.99 for plans without ads. This change follows the crackdown on password sharing that Netflix launched in 2023.
Content investment to reach $20 billion
The price hike comes at a time of massive investment in content. Netflix plans to spend approximately $20 billion on content in 2026, a 10% increase from the previous year. The company is expanding its offerings to include live events, including NFL games, MLB matches, WWE broadcasts and boxing matches.
CFO Spence Neumann mentioned at the investor conference that key drivers of revenue growth will be pricing, growth in the membership base and roughly doubling advertising revenue to about $3 billion .
Shares react positively after the exit from Warner Bros acquisition
The pricing comes a month after Netflix abandoned plans to buy the studio and streaming division of Warner Bros. Discovery after Paramount Skydance submitted a higher offer of $31 per share, and Netflix received a $2.8 billion compensation fee.
Netflix shares ended yesterday at $93 with a market capitalization of $394.18 billion. This puts the stock in a 52-week range of $75.01 to $134.12.
Netflix boosts pricing power in competitive environment
The higher prices show Netflix's perceived "pricing power" relative to rival services, with the company, which has more than 325 million customers at the end of 2025, expecting increased revenue per subscriber to make up for the eventual exodus of some of its clientele.
The price increase represents an average 11% increase across Netflix's product offerings, according to TD Cowen analysis. With the new prices, average revenue per subscriber in the US and Canada will increase by 6% year-on-year.
This puts Netflix among the streaming services that have systematically increased prices in recent years. Most of the major streaming services have been increasing in price in recent years in an attempt to achieve the difficult-to-achieve profitability of subscription services.
What price increases can bring
1) Optimistic scenario - most subscribers will stay
In the optimistic scenario, management's thesis that Netflix has "pricing power" will be confirmed and customer churn will remain minimal. For example, if 90% of US subscribers accept the price increase and 10% leave or switch to a cheaper plan, the higher ARPU would still lift revenues in the region by several percentage points above current estimates on a net basis. In this case, the price hike would help to achieve the top end of the $51.7 billion outlook without significantly impairing profitability or engagement. This would confirm that Netflix has definitively gone from a pure growth story to a "pricing power" business akin to cable or premium TV channels.
2) Medium scenario - some subscribers will leave, but ARPU will make up for it
More realistic is the middle scenario, in which the price increase will cause a more noticeable subscriber churn, but higher prices will partially offset it. Imagine 20-25% of US users either canceling their subscription, switching to a cheaper plan, or sharing their account more. With an average 11% price increase and roughly 6% ARPU growth in the US/Canada, total revenues in the region could still remain slightly higher than in 2025, albeit below the high end of the corporate outlook.
Higher revenue per subscriber, higher share of ad-supported plans, significantly higher monetization for those who stay. For the stock, this may mean that the market stops seeing price through the number of users and focuses more on margins, ARPU and free cash flow.
3) Pessimistic scenario - a larger proportion of subscribers will cancel their subscriptions
In the negative scenario, price increases cross the psychological threshold, especially for the standard plan without ads, which has swung above $20, and the premium plan approaching $27. If, for example, a third of subscribers in the most expensive segments left, or a significant portion switched to a cheaper plan with ads, Netflix could see its advertising revenue component grow, but overall subscription revenue would fall short of its $50.7-51.7 billion target.
In that case, the company would appear to be hitting the limit of households' willingness to pay more money for streaming in an environment where almost everyone is getting more expensive. The "pricing power" narrative would get a crack, and investors would start to re-price Netflix more as a cyclical consumer title dependent on household wallets than as a "must-have" digital service with unlimited pricing power.