Business

The consecration of a Hindu temple in Ayodhya, the mythical birthplace of the god Ram, on January 22nd was a huge religious event in India. It carried political significance, too. It was presided over by the prime minister, Narendra Modi, and signalled the unofficial start to the campaign of his Bharatiya Janata Party (BJP) ahead of a general election in April and May. It also turned into a business jamboree. Attendees included a “Who’s Who” of India Inc, from the heads of the country’s mightiest conglomerates to founders of its sexiest startups. All came to pay tribute to Ram—but mostly to Mr Modi.Some corporate guests came because of genuine appreciation for his stewardship of the economy. Others showed up out of fear that if they didn’t, they and their businesses might find themselves fending off tax inspectors or struggling to secure business permits from a government that critics accuse of creeping authoritarianism. This odd mix of sentiment reflects the business world’s attitude towards India’s enigmatic strongman.image: The EconomistBusinesses certainly have a lot to be grateful for. During Mr Modi’s decade-long tenure GDP has grown faster than it has in most big countries. In the third quarter of 2023 it roared ahead by 7.6%, year on year. Foreign direct investment went from $24bn in the year before Mr Modi’s election in 2014 to more than double that on average in the past three financial years (see chart 1). On January 22nd India’s stockmarket overtook Hong Kong’s as the world’s fourth-biggest by market value.Not all of this is Mr Modi’s doing. India has, for example, benefited from Western firms’ efforts to diversify supply chains away from China. But bosses also credit his policies. The roll-out of a national digital-ID scheme has fuelled a boom in digital payments and e-commerce. A national goods-and-services tax (GST) has replaced a baffling patchwork of state levies. The financial sector went from crippled to sturdy in ten years and the government has turned talk of privatisation into (some) action, notably selling Air India, the long-suffering flag carrier.Economists debate the wisdom of protectionist bungs such as higher tariffs and “production-linked incentives” (PLIs) to promote manufacturing, on which the state is spending $26bn over five years—but businesses love them. Christopher Wood of Jefferies, an investment bank, forecasts that if the BJP lost the election, the stockmarket would drop by 30%.Industrialists aren’t shy about expressing their adulation. Two weeks before making the pilgrimage to Ayodhya, the heads of India’s three biggest conglomerates fawned on Mr Modi at a jamboree in his home state of Gujarat. Mukesh Ambani of Reliance Industries called Mr Modi “the most successful prime minister in India’s history”. Natarajan Chandrasekaran of Tata Sons spoke of Mr Modi’s “visionary leadership”. Gautam Adani of the Adani Group lauded him for setting “a benchmark for a more inclusive world order”. Lesser business figures zealously echo such sentiments, ideally within earshot of government officials.In private, the praise is more guarded. Corporate leaders value Mr Modi’s willingness to hear them out. He often turns up in person at business shindigs, which have mushroomed on his watch. Behind closed doors he meets not just big bosses but also lowlier executives. Regional and Indian heads of multinationals report that during such audiences he listens to them intently, asks clever questions and never comes across as distracted or bored. They feel free to give him their unadulterated opinions about policy, which he takes in even if he then feels free not to act on them.He is also perceived as personally incorruptible—a welcome exception to India’s venal politics. Some businesspeople grumble that the government makes life easier for national champions, such as Reliance and Adani Group. But they concede that these groups are putting money into areas such as telecoms, energy and infrastructure, all of which India needs, and that their relatively meagre financial returns do not scream cronyism. When prominent companies stumble because of mismanagement, Mr Modi does not intervene to save them from insolvency. That includes firms run by people seen to be close to him, such as Mr Ambani’s brother, Anil, who headed a rival conglomerate, and the Ruia family, owners of Essar Steel.Mr Modi has also, bosses acknowledge, opened doors for them abroad. He used his recent stint chairing the G20 club of big economies to promote himself—but also to promote his country. He has established stronger ties with America, Israel, Saudi Arabia and the United Arab Emirates. Indian financiers and executives say they can now get meetings with American, Arab and European bankers who a decade ago would have ignored their calls.image: The EconomistCriticisms come in more hushed tones. India’s GDP per person grew briskly under Mr Modi by emerging-world standards but had risen half as fast again under his predecessor, Manmohan Singh of the Congress party, who also ruled for ten years. Stockmarket returns, too, have been lower in the past decade than in the one before (see chart 2). India may be resurgent, but the official measure of business investment as share of GDP is not (see chart 3).image: The EconomistMany of Mr Modi’s most successful policies, such as the digital ID and the GST, were first put forward by Mr Singh’s government. Some taxes are lower but, with the exception of the GST, no less Byzantine. The 73-year-old prime minister has no obvious successor. Although he remains sprightly, his eventual departure could therefore lead to political instability of the sort that businesses prefer to avoid.Such concerns come up again and again in conversations with prominent business figures. None wants to be quoted. One reason for the public silence is as old as the Indian state: a rapport with the government can help businesses cut through impenetrable red tape; a lack of one can leave them at the mercy of bureaucrats. Another reason is new, specific to Mr Modi’s BJP, and uttered underbreath. Criticism, businesspeople whisper, can invite retribution. This may come in the form of a probe by the Department of Revenue, the Serious Fraud Investigation Office or the Central Bureau of Investigation. It may concern matters dating back years, which makes defending yourself harder and costlier. To many luminaries of India Inc, staying in the government’s good graces has gone from advisable to existential.Fear of no favourA tycoon last aired such concerns openly four years ago. Rahul Bajaj of the Bajaj Group, another conglomerate, told Amit Shah, Mr Modi’s home-affairs minister, “You are doing good work, but despite that we don’t have the confidence that you will appreciate it when we criticise you openly. Intolerance is in the air.” Under Mr Singh, by contrast, the government was fair game. Mr Shah responded that “there is no need for anybody to fear…we have done nothing to be concerned about [with respect to] any criticism”. “If anyone does criticise,” he added, “we will look at the merit…and make efforts to improve ourselves.”Bajaj died in 2022, aged 83. No other corporate grandee has publicly echoed him since. In the eyes of his fellow industrialists, Mr Modi and his government are still doing good work. But intolerance is still in the air, too. ■ More

Jon Stewart will serve as “The Daily Show” host on Mondays starting Feb. 12, and appear at least through the 2024 election cycle.
The rest of the week will feature a rotating cast of show regulars.
Stewart’s return comes as Paramount, Comedy Central’s owner, seeks to keep the signature series afloat at the network.
The economics of late-night TV have weakened in recent years, as advertisers flee the linear TV space and audiences have turned to streaming services and video clips on YouTube.

Guest Jon Stewart on “The Late Show with Stephen Colbert” on June 17, 2019.
CBS Photo Archive | CBS | Getty Images

Jon Stewart is returning to “The Daily Show” — but only on Mondays.
The comedian helmed the Comedy Central talk show between 1999 and 2015, before passing the torch to South African comedian Trevor Noah. Noah departed the show in late 2022, and the program has cycled through a slew of guest hosts over the past year, but never settled on a single replacement.

Stewart will serve as “The Daily Show” host on Mondays starting Feb. 12, and appear at least through the 2024 election cycle. The rest of the week will feature a rotating cast of show regulars.
Stewart’s return comes as Paramount, Comedy Central’s owner, seeks to keep the signature series afloat at the network, especially during an election year, as Stewart’s political commentary has often thrived in the past.
The economics of late-night TV have weakened in recent years, as advertisers flee the linear space. Audiences, too, have gravitated toward streaming video and often watch these programs online via YouTube the day after they run.
“Jon Stewart is the voice of our generation, and we are honored to have him return to Comedy Central’s ‘The Daily Show’ to help us all make sense of the insanity and division roiling the country as we enter the election season,” Chris McCarthy, president and CEO of Showtime and MTV Entertainment Studios, said in a statement Wednesday. “In our age of staggering hypocrisy and performative politics, Jon is the perfect person to puncture the empty rhetoric and provide much-needed clarity with his brilliant wit.”
Since his 2015 exit from “The Daily Show,” Stewart has kept busy as the executive producer of CBS’ “The Late Show with Stephen Colbert” and weekly spots on Apple’s streaming service via his show “The Problem with Jon Stewart,” which was recently canceled.

Stewart is also an avid philanthropist and has lobbied for health-care benefits for veterans and 9/11 first responders.Don’t miss these stories from CNBC PRO: More

Chipotle Mexican Grill wants to hire 19,000 new workers ahead of its busiest time of the year.
The burrito chain’s recruitment goal is up about 27% from a year ago.
Attracting workers has become more difficult for restaurants in recent years.

A “Now Hiring” sign is displayed in front of a Chipotle restaurant on October 07, 2022 in Washington, DC.
Anna Moneymaker | Getty Images

Chipotle Mexican Grill hopes to recruit 19,000 new employees to make its burritos and bowls this spring, the company said Wednesday.
The company’s hiring target suggests it’s expecting an even busier spring than usual, despite another round of menu price hikes in October. The chain’s recruitment goal is about 27% higher than a year ago, when it sought 15,000 new workers for its so-called burrito season in March through May.

For Chipotle, having enough workers becomes even more important during its busy period. The chain needs plenty of employees to meet higher demand. The spring weather lures back Chipotle customers who stayed away during the winter months, but the chain’s concentration in college towns means sales usually slow in the summer.
Chipotle has more than 110,00 workers currently.
Attracting workers has become more difficult for the restaurant industry in recent years, largely due to the pandemic. Hundreds of thousands of restaurant jobs disappeared as bars and eateries shuttered, either temporarily or permanently. Industry veterans switched to white-collar or warehouse jobs, seeking safety from Covid-19, better working conditions or both. In September, the restaurant workforce finally bounced back to pre-pandemic levels, according to Department of Labor data.
But even before Covid, restaurants struggled to hire and retain younger workers, who often seek internships instead.
Chipotle on Wednesday also touted new benefits that aim to help those younger workers tackle financial challenges. The company will match up to 4% of eligible employees’ salaries by making contributions to their 401(k) if they make student loan payments. Additionally, Chipotle workers can also sign up for a Credi.ai debit card, which builds credit without fees or interest.
Chipotle is expected to report its fourth-quarter earnings after the bell Feb. 6. More

The FAA launched an audit of Boeing’s aircraft production after a door panel blew out during an Alaska Airlines flight.
The agency has dispatched a “couple of dozen” inspectors to Boeing’s production lines, FAA Administrator Mike Whitaker told CNBC.
“We’re shifting from more of an audit approach to a direct inspection approach,” he said.

Michael Whitaker, nominee to be the next administrator of the Federal Aviation Administration (FAA), testifies during a Senate Committee on Commerce, Science, and Transportation hearing on Capitol Hill October 4, 2023 in Washington, DC. The FAA has been without a Senate-confirmed administrator for 18 months. (Photo by Drew Angerer/Getty Images)
Drew Angerer | Getty Images News | Getty Images

WASHINGTON — The Federal Aviation Administration has “boots on the ground” at Boeing’s 737 Max factory — and will keep them there until the agency is convinced the manufacturer’s quality control system is working, FAA Administrator Mike Whitaker told CNBC.
The FAA earlier in January said it will audit Boeing’s Max production line, after an almost brand-new Boeing 737 Max 9’s door plug blew out on an Alaska Airlines flight at 16,000 feet, exposing passengers to a force so powerful it sucked out seatbacks and headrests, according to federal investigators.

No one was seriously injured on the flight, and no one had been seated next to the gaping hole left by the blowout. The FAA grounded that model of Boeing’s best-selling 737 Max a day after the accident and later said it will increase oversight of the company’s production lines.
“We’ve got a lot of inspectors on the ground, visually inspecting the aircraft as it comes through,” Whitaker said Tuesday in an interview at FAA headquarters. “We’re shifting from more of an audit approach to a direct inspection approach.”
The scale of such a review is a challenge, Whitaker said, citing the manpower required to conduct that many inspections. The FAA has dispatched a “couple of dozen” inspectors, he said.
“Until we’re comfortable that the [quality assurance] system is working properly … we’re going to have boots on the ground,” he said.
Both Alaska and United Airlines said they found loose bolts on several Max 9 planes during preliminary inspections.

Return to service

The FAA is working with Boeing and airlines on inspection instructions that would pave the way for the 737 Max 9 to return to service. Whitaker, who is three months into the FAA’s top job, declined to comment on when he expected the planes to return to service.
“It’s been difficult to predict, so we’ve sort of stopped trying,” he said. “But as soon as we get it sorted out it’ll be up again.”

In this photo released by the National Transportation Safety Board, investigator-in-charge John Lovell examines the fuselage plug area of Alaska Airlines Flight 1282 in Portland, Oregon, on Jan. 7, 2024.
National Transportation Safety Board via AP

Though safety inspections were initially estimated to take between four and eight hours per plane, Whitaker said they’ve “been longer than that.”
“We’ve required a lot of measurements,” he said. “Once the area’s exposed, we want to understand bolt tensions and gaps and things of that nature. So we’ve required more data than would normally be the case because we really wanted to understand the issue.”
United, which has 79 Boeing 737 Max 9 planes in its fleet, more than any other carrier, said Monday it’s assuming the planes will remain grounded through the end of January. The carrier is forecasting an adjusted loss of as much as 85 cents per share this quarter as a result.
United CEO Scott Kirby on Tuesday expressed frustration at Boeing and its repeated production issues and delays. He said United is taking the larger variant, the 737 Max 10, out of its fleet plans, because of lengthy delivery delays. The FAA hasn’t yet certified that plane, nor has it certified the 737 Max 7, a smaller model that Southwest Airlines is awaiting.

Boeing scrutiny

The accident on Alaska Airlines Flight 1282 is the latest and most serious in a string of apparent production flaws at Boeing, which has been trying to clean up a reputation for quality that was tarnished by two deadly crashes about five months apart. Those accidents involved the 737 Max 8, a smaller variant of the same aircraft family. A worldwide grounding of both the Max 8 and Max 9 began to lift about four years ago.
Alaska Airlines CEO Ben Minicucci told NBC News on Tuesday that the door-plug blowout was “unacceptable out of the factory” and that the carrier is adding additional staff for oversight on the production line to make sure there is “a second set of eyes to look at those critical areas.”
On Tuesday, Stan Deal, CEO of Boeing’s commercial airplane unit, its largest, apologized for the delays in getting its aircraft to customers.
“We have let down our airline customers and are deeply sorry for the significant disruption to them, their employees and their passengers,” he said in a written statement. “We are taking action on a comprehensive plan to bring these airplanes safely back to service and to improve our quality and delivery performance.”
Boeing is planning to pause work at several production lines for safety sessions for factory workers to “evaluate what we’re doing, how we’re doing it and make recommendations for improvement,” Deal told staff Tuesday. The sessions start Thursday at the 737 factory in Renton, Washington.

This photo released by the National Transportation Safety Board shows the door plug from Alaska Airlines Flight 1282 on Monday, Jan. 8, 2024, in Portland, Ore.
National Transportation Safety Board via AP 

Boeing announced Jan. 16 the appointment of an independent advisor to lead a review of the Max 9 problem.
When asked whether the Max 9 crisis will mean more of a permanent change in how the FAA, which certifies Boeing’s planes, oversees the company, Whitaker said the agency is “looking at all options.”
“If there are functions that Boeing has not done appropriately, I think we’ll look at whether we should take over some of those functions or whether there’s an opportunity for a third party, a nonprofit technical organization, to provide a fresh set of eyes,” he said.
“There’s no reason to think that they can’t get back to a point where they’re meeting their quality standards and an increasing production,” Whitaker said. “But right now, we need to be assured of that.”  More

Netflix added 13.1 million subscribers during the fourth quarter.
The company now has 260.8 million paid subscribers.
The company also topped Wall Street’s revenue expectations.

LOS ANGELES — Shares of Netflix jumped in extended trading Tuesday after the company reported adding 13.1 million subscribers during the fourth quarter, stronger growth than Wall Street expected as the streamer builds its ad-supported service and cracks down on password sharing.
Netflix now has 260.8 million paid subscribers, a new record for the service.

The subscriber growth easily tops the 8.76 million paid membership adds Netflix reported in the third quarter. The company also blew past Wall Street’s fourth-quarter expectations of 8 million to 9 million.
Here are the results:

Earnings: $2.11 per share vs. $2.22 per share expected by LSEG, formerly known as Refinitiv
Revenue: $8.83 billion vs. $8.72 billion expected by LSEG
Total memberships: 260.8 million vs. 256 million expected, according to Street Account

Netflix reported fourth-quarter net income of $937.8 million, or $2.11 per share, versus $55.3 million, or 12 cents per share, in the prior-year period.
The company posted revenue of $8.83 billion for the quarter, up from $7.85 billion in the year-ago quarter.
As Netflix focuses on improving profits, the company increased its 2024 full-year operating margin forecast to 24%, up from a range of 22% to 23%. It cited the weakening of the U.S. dollar and a stronger-than-forecast fourth-quarter performance.

The company also projects earnings per share of $4.49 for the fiscal first quarter of 2024, higher than the $4.10 Wall Street had expected.
While rivals in the streaming space have struggled to reach profitability, and have been cutting down on content spend, Netflix is prepared to invest in a larger slate. However, it won’t be doing that through acquisitions of traditional entertainment companies or linear assets, the company said in a letter to shareholders Tuesday.
“As our competitors adjust to these changes, it’s logical to expect further consolidation, particularly among companies with large and declining linear networks,” the company said. “We’re not interested in acquiring linear assets. Nor do we believe that further M&A among traditional entertainment companies will materially change the competitive environment given all the consolidation that has already happened over the last decade.”
But that won’t stop the company from partnering with content makers who have traditionally worked in the linear space. Netflix took another step toward building subscribers when it announced earlier Tuesday that it would stream the popular WWE Raw starting next year. The deal is the streaming platform’s biggest step yet into live entertainment.
The company foresees continued competition going forward.
“It’s why continuing to improve our entertainment offering is so important, and as many of our competitors cut back on their content spend, we continue to invest in our slate,” the company wrote to shareholders.
Netflix is still navigating its transformation from targeting subscriber growth to focusing on profit, using price hikes, password crackdowns and ad-supported tiers to boost revenue.
Investors got a sneak preview of growth in Netflix’s advertising-based plan earlier this month, when the company’s president of advertising, Amy Reinhard, told attendees at the Variety Entertainment Summit at CES that the company now has more than 23 million global monthly active users. That’s up from 15 million that the company reported in November.
While Netflix doesn’t see ads as its primary revenue driver in 2024, it’s still looking to scale that part of its business.
“We’re focused on the additional work that we can do in that space,” said Greg Peters, co-CEO of Netflix, during the company’s earnings call. “That means making the ads plan more attractive. We’ve added streams, higher resolution, downloads, it means engaging partner channels. You’ll see us do more than that.”
Netflix is also looking at making its ad tier more attractive to advertisers, including by bolstering its sales teams and ad operations to “meet brands where they need us and how they need us.”
“We’re focused on the long-term revenue potential here,” said Peters. “We’re very optimistic about it. It’s a huge opportunity.” More

Netflix co-CEO Ted Sarandos said during his company’s earnings conference call that the deal to stream WWE doesn’t mean Netflix has changed its live sports strategy.
Netflix has long said it has no desire to acquire live sports rights, but Tuesday’s WWE Raw deal is a big step for the streamer into live events.
Sarandos called WWE “sports entertainment,” which he distinguished as different from traditional sports.

Dwayne ”The Rock” Johnson and John Cena in action during WrestleMania XXVIII at Sun Life Stadium on April 1, 2012 in Miami Gardens, Florida.
Ron Elkman | sports Imagery | Getty Images Sport | Getty Images

Netflix co-Chief Executive Officer Ted Sarandos wants to make one thing clear about the company’s deal to license WWE’s Raw for the next ten years: Professional wrestling isn’t sports.
“WWE is sports entertainment,” Sarandos clarified during Netflix’s fourth-quarter earnings conference call. “It’s really as close to our core as you can get in terms of sports storytelling. In terms of the deal itself, it has options and the protections we seek in our general licensing deals, and with economics that we’re super happy with globally. So, I would not look at this as a signal of any change to our sports strategy.”

After Netflix and WWE parent company TKO Group announced the deal Tuesday morning, it sparked questions about whether Netflix would try to buy streaming rights for one of the major sports leagues. But Sarandos repeatedly tried to put those discussions to rest.
Netflix has held some preliminary discussions with the National Basketball Association for possible streaming packages that may arise as the NBA renews its media rights later this year, CNBC reported in October. Still, given the league’s desire to limit itself to three media partners, Netflix likely wouldn’t play a major role in negotiations, CNBC reported at the time.
Sarandos’s comments suggest Netflix won’t be a near-term player in those talks or any others regarding traditional live sports rights. Netflix has dived in to “sports adjacent” programming, building documentary series around Formula 1 and professional tennis, golf, cycling and football.
Netflix paid more than $5 billion for 10 years of WWE’s Raw and other international programming. The deal has an out clause for Netflix after five years, and includes an option for Netflix to extend for an additional 10 years.
Sarandos called the WWE Raw deal “the inverse of Formula 1,” as WWE is popular in the U.S. and has a relatively small international audience.

“We can build [WWE] like we have with Formula 1 through our shoulder programming,” Sarandos said. “Now, the events themselves are the storytelling with WWE. So, this is a proven formula for us.”
Still, Netflix executives have developed a reputation for changing their mind on key business issues. For years, Netflix stayed away from advertising and cracking down on password sharing. They’ve reversed course on both subjects in recent years.
The move to pay a giant rights deal is a clear shift for Netflix. Pushing into traditional sports could eventually be a logical step for the company — no matter what Sarandos said Tuesday.
WATCH: MNTN’s Mark Douglas weighs in on Netflix-WWE deal More

Johnson & Johnson has reached a tentative settlement to resolve investigations by more than 40 states into whether the company misled patients about the safety of its talc baby powder and other talc-based products.
The settlement does not resolve the tens of thousands of lawsuits, some of which are slated to go to trial this year, alleging that those talc-based products caused cancer.
J&J CFO Joseph Wolk told The Wall Street Journal that the company will pay $700 million to settle states’ claims.

In this photo illustration, a container of Johnson and Johnson baby powder is displayed on April 05, 2023 in San Anselmo, California. 
Justin Sullivan | Getty Images

Johnson & Johnson has reached a tentative settlement to resolve an investigation by more than 40 states into claims the company misled patients about the safety of its talc baby powder and other talc-based products, the company said in a statement to CNBC on Tuesday. 
Notably, the settlement does not resolve the tens of thousands of consumer lawsuits, some of which are slated to go to trial this year, alleging that those talc-based products caused cancer.

Those cases have for decades caused financial and public relations trouble for J&J, which contends that its talc-based products and now-discontinued talc baby powder are safe for consumers.
J&J said in an October securities filing that 42 states and Washington, D.C., had launched a joint investigation into its marketing of talc-based products. The company will pay $700 million to settle the probe, its CFO Joseph Wolk told The Wall Street Journal on Tuesday.
Last year, J&J only set aside about $400 million to resolve U.S. state consumer protection claims.

More CNBC health coverage

A J&J spokesperson refused to confirm the settlement figure to CNBC.
Erik Haas, J&J’s worldwide vice president of litigation, confirmed the deal in a statement without providing additional details.

“Consistent with the plan we outlined last year, the company continues to pursue several paths to achieve a comprehensive and final resolution of the talc litigation,” Haas told CNBC. “As was leaked last week, that progress includes an agreement in principle that the Company reached with a consortium of 43 State Attorneys Generals to resolve their talc claims.”
Bloomberg first reported about the settlement earlier this month, citing sources familiar with the matter. 
J&J, which reported fourth-quarter results on Tuesday, has twice tried to resolve the consumer talc cases by offloading those liabilities into a subsidiary, LTL Management, and having that unit file for Chapter 11 bankruptcy protection. 
A New Jersey bankruptcy judge in July rejected the second bankruptcy attempt, stating that LTL Management wasn’t in sufficient financial distress. A U.S. appeals court in April dismissed the first bankruptcy attempt for the same reason. 
As part of the latest failed bankruptcy attempt, J&J proposed to pay $8.9 billion to talc claimants.
Haas said during an earnings call in October that the company is asking the Supreme Court to overturn the lower court rulings denying bankruptcy protection to LTL Management. 
J&J also said late last year that it is considering a third bankruptcy attempt as it tries to push forward with that proposal.
J&J ended sales of its talc-based baby powder globally last year.
Don’t miss these stories from CNBC PRO: More

Netflix prepared its users and investors for more price hikes to come in its quarterly investor letter.
Netflix announced Tuesday it struck a deal to add 10 years of WWE’s Raw to its content slate.
Netflix hasn’t raised the price of its ad tier from $6.99 per month since it launched in 2022.

The Netflix logo displayed on a phone screen and its website on a laptop screen are seen in this photo taken in Krakow, Poland, June 8, 2023.
Jakub Porzycki | Nurphoto | Getty Images

Get ready to pay more money for Netflix.
You had to read down to page six of Netflix’s shareholder letter to find it. But there it was. One dreaded sentence for price-conscious consumers. One big cheer for investors.

“As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service,” the company told investors.
Netflix launched its advertising tier in November 2022 as it cracked down on password sharing to give users a cheaper way to access content from the world’s largest streamer. Thus far, not that many people have signed up. Netflix announced earlier this month it has 23 million monthly active users on its advertising tier. That may be 12 to 15 million paying subscribers, estimated Evercore ISI analyst Mark Mahaney.
Netflix has more than 260 million global subscribers after adding 13.1 million in the fourth quarter — the company’s largest fourth quarter add ever.
The takeaway for Netflix executives may be that most of its audience is content with paying what Netflix is charging. A standard Netflix subscription in the U.S. currently costs $15.49 per month. The ad tier costs $6.99 a month — the same price at which it launched in 2022.
On Tuesday, Netflix announced WWE’s Raw would come to the service in 2025. It’s Netflix’s biggest foray into live entertainment yet. Netflix is paying more than $5 billion for 10 years of Raw.

With more content, Netflix may have leverage to convince its users that they should pay more money. The company said it plans to increase its content amortization by a “high single digit percentage year over year,” according to its shareholder letter.
Disney is planning to debut a direct-to-consumer ESPN later this year or in 2025. That product will likely cost far more than Netflix. That will also give the company cover to raise prices, as consumers may view Netflix as an even better price-to-value proposition compared to competitive streamers.
Netflix didn’t announce a price hike in its quarterly letter or say when one is coming.
But rest assured: it’s coming.
WATCH: Strong subscriber growth leads to another strong quarter for Netflix More