Why is Netflix so expensive? Its own earnings just explained it

$107.88 a year.

That is what Netflix's cheapest plan costs in the United States right now, after the company's October 2026 earnings showed it falling short on a different number entirely: Advertising.

Netflix reported its third-quarter results on 20 October, in a shareholder letter and earnings call covered by Variety and CNBC the same day. Revenue of $12.87 billion matched what Wall Street expected, up almost 12% from a year earlier, though growth has slowed to its weakest pace in three years. The company also cut its full-year advertising sales target to about $2.7 billion, down from roughly $3 billion, and warned that growth will slow again in the final three months of the year. Shares fell about 6% straight after the news came out.

Here is the part that hits your wallet. Netflix wants more people on its cheap, ad-supported plan, because that is where its growth plan says future money should come from, the same way free TV channels make money from ads instead of charging viewers. Right now that plan is behind schedule. So Netflix leans harder on the plans without ads, and those are the ones that keep getting more expensive.

This is not Netflix's only headline this month. Ten days earlier, reports said the company could cut about 800 to 850 jobs, roughly 5% of its staff, as part of a restructuring. We covered the layoff reports in detail when they first surfaced. These earnings now confirm the wider financial pressure sitting behind that story, the same pressure that keeps pushing prices up for everyone still paying for the service.

Why is Netflix so expensive?

Netflix has raised its US prices twice in less than two years, in January 2025 and again in March 2026. Both times, the ad-free plans went up by more than the ad-supported one.

The ad-free Standard plan in the US has climbed from $15.49 to $19.99 in two price rises, a jump of almost 30%. The ad-supported plan moved from $6.99 to $8.99 over the same stretch, a smaller rise in dollar terms.

Co-CEO Greg Peters said on the earnings call that Netflix is "currently a bit behind our aggressive target for the year" on advertising, blaming slow rollout of new ad tools and delays getting ad partners connected. He called it "a modest short-term hit for a better long-term strategic position."

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In plain terms, the company is still building the machinery that sells ads against your favorite shows. Until that machinery works properly, the money has to come from somewhere else. That somewhere else is the monthly bill of anyone who pays for Standard or Premium.

Photo: Santeri Viinamäki / Wikimedia Commons, CC BY-SA 4.0

How much is Netflix a month?

Netflix's own help pages show different prices in every country. Here is what every plan costs right now, and what a full year actually adds up to.

*South Africa has no ad-supported plan yet. Its cheapest option without ads is R99. A phone-and-tablet-only Mobile plan costs R59 a month, R708 a year.

A year of Netflix's cheapest, ad-supported plan in the United States now costs $107.88, according to The Big Fuss's October 2026 count of Netflix's own posted prices in five countries.

The UK saw the biggest single jump of any market this year. Its ad-supported plan rose from £5.99 to £7.99 in September, a 33% increase in one move. Canada has not had a price change since January 2025. Australia dropped its old Basic plan completely in early 2025, so the ad-supported tier is now the only cheap option left there too.

Why did Netflix's ad business fall short?

Selling ads on a streaming service sounds simple. Building the system to do it well is not. Netflix needs advertisers to target specific audiences, measure how many people actually saw an ad, and plug into the same ad-buying platforms brands already use for TV and online video.

Netflix admits some of those tools and partner connections rolled out slower than planned, which is why the 2026 ad revenue guess dropped by roughly $300 million. Netflix has told investors for two years that advertising is its next big growth lever, alongside password-sharing crackdowns and live sports, so Wall Street punished the miss straight away.

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Netflix's own operating income still climbed 37% in the quarter, to $4.46 billion, so the company is not struggling for cash. The problem is narrower than that. It picked a specific number for advertising at the start of the year, told investors to expect it, and now has to explain why it will land about 10% short.

For Q4, Netflix told investors to expect revenue near $13.44 billion, still growth of more than 11%. But it also guided to net income of $2.79 billion, below the $3.07 billion analysts expected.

Photo: Netflix Inc. / Wikimedia Commons, Public domain

Is Netflix with ads worth it?

For most people, yes, if you can live with the trade-offs. The ad-supported plan is the cheapest way onto Netflix in every market except South Africa, where it is not offered at all. You get full HD picture and two screens at once in most countries, close to what the mid-tier Standard plan offers.

What you give up is some control. Ads play before and during most shows and movies, some titles are not available at all on the ad tier, and downloads are limited on certain devices. Netflix also charges extra for sharing your account outside your own home, a fee that sits on top of whichever plan you pick and runs from about £5.99 a month in the UK to C$8.99 in Canada.

If those trade-offs do not bother you, the ad-supported plan is usually the biggest single saving on your streaming bill. In the US, choosing ads over Standard saves $132 a year. In Australia, the gap is even wider, at A$132 a year between the two plans.

When will Netflix raise prices again?

Nobody outside Netflix knows the exact date. But the pattern over the last two years is a US increase roughly every 12 to 14 months, with other countries following on their own separate schedule months later. The UK's September 2026 rise came 19 months after its last one. Canada is now the market that has gone longest without a change, since January 2025.

Netflix is not the only household bill climbing this year. Home insurance premiums in the US hit a record average in 2026, and anyone carrying a home loan has felt an even bigger squeeze, since a $300,000 mortgage can add up to more than double that amount in interest alone over the life of the loan. Phone bills might be the one that actually moves in the other direction, if SpaceX's spectrum deal with the big carriers really does push prices down.

Netflix's Q4 2026 results, due in January, will show whether the ad business is catching up to its lowered target or falling further behind. South Africa's R99 plan has stayed untouched since May 2025, longer than almost any other market on the table above, which only makes the next move more likely. Whichever market goes first, the pattern so far points the same way. The ad-free plans move. The ad tier Netflix is fighting to grow stays put, for now.