Netflix Is Raising Prices Yet Again
Get ready for your wallet to take a little hit, Netflix subscribers, as the company is raising prices for some of its plans effective immediately. The streaming service made the announcement during its most recent quarterly earnings report. The good news? Anyone who subscribes to the ad-supported plan ($6.99 a month in the U.S.) or the Standard plan ( $15.49 in the U.S.) will be unaffected. The Basic and Premium plans, however, are going up in price.
In its Q3 2023 letter to investors, Netflix revealed that the Basic plan in the U.S. will now cost $11.99 per month, up from $9.99. Meanwhile, the Premium plan will now cost $22.99 per month in the U.S., up from $19.99. Prices will also increase effective today for subscribers in the U.K. and France. In the letter, Netflix explained the increases, saying the following:
"While we mostly paused price increases as we rolled out paid sharing, our overall approach remains the same — a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more. Starting today, we're adjusting prices in the US, UK and France."
The company had hit the pause button on price increases during the pandemic. But as the streaming wars heat up, that has long since been abandoned. Netflix already increased its prices early last year. The streaming leader has been under increased financial pressure since its stock price plummeted last year and has been looking to shore up its finances ever since. Consumers — quite literally — are the ones paying the price.
More problems, more money
Last year, things got shaky for Netflix when the company reported its first subscriber loss in years, which caused the stock price to plummet. In the aftermath, Netflix began looking for new ways to not only maximize profit from current customers but to maximize subscriber growth as well. The company rolled out a password crackdown earlier this year, which appears to be working. Netflix reported adding 9 million new subscribers in the most recent quarter.
The other big change was the addition of an ad-supported tier. Again, all signs point to that working out for Netflix as well. The company resisted putting ads on the platform for years but the pressures of increased competition and slowing subscriber growth forced the issue. Speaking to the ad side of the business in the subscriber letter, Netflix said the following:
"Ad dollars follow eyeballs and more and more TV viewing is shifting from linear to streaming — we're a leader in streaming engagement, and the engagement of our ad tier members is strong. While we have much work to do to build out this business, we're making good progress and laying the foundation for what we believe should be a multi-billion dollar revenue stream over time. Our immediate priority is building our ad membership so that Netflix becomes an essential buy for advertisers, which is key for advertising to become material to our business."
Unfortunately for consumers, as cord-cutting continues to accelerate, streamers are going to get more aggressive with these price increases. Disney+ and Hulu recently announced price hikes, and other streamers are expected to follow suit as well. This is what the streaming-dominated landscape is going to look like for the foreseeable future, it seems.