Streaming giant Netflix is raising the cost of monthly subscriptions for it's Standard and Premium plans, while keeping its Basic plan the same price. Having started as a DVD subscription service over two decades ago, Netflix has grown into one of the most powerful media companies in the world. That's thanks to its huge subscriber base, of almost 200 million worldwide, as well as its stable of hit TV shows and original movies, which started with House of Cards and has grown to include the likes of the hits Stranger Things and The Witcher as well as newer shows like The Queen's Gambit and the upcoming Assassin's Creed series.
Despite increased competition in the past year, which has seen the launch of Apple TV+, Disney+, Peacock, and HBO Max, along with traditional rivals Hulu and Amazon Prime, Netflix remains one of the most popular sources for streaming movies and TV. And even though subscriber numbers briefly dropped due to the controversy around French movie Cuties and the resultant backlash, it's still the pre-eminent streaming service worldwide. However, that doesn't mean that Netflix isn't feeling the pinch like so many other businesses around the world have in 2020.
Now, The Verge announces Netflix has instituted a price increase in the USA for two of its three plans. The most popular plan, The Standard plan, which allows viewers to watch in HD on two screens at a time, goes up from $12.99 to $13.99. The Premium plan, which allows up to four screens and Ultra HD (4K), also goes up, from $15.99 to $17.99. The Basic plan, which offers one screen and SD-only viewing, remains $8.99 a month. The increase comes into effect immediately for new subscribers, while existing subscribers will see the increase from their next billing cycle. A Netflix spokesperson cited the increased cost of producing a wide variety of content for the decision. You can read the full comment below:
[The price increase is] so that we can continue to offer more variety of TV shows and films. As always we offer a range of plans so that people can pick a price that works best for their budget.
The price hike comes just a month after it was revealed that Netflix was likely to increase prices. That announcement made it clear that Netflix believes it can increase prices by a dollar or two and not see a significant drop in subscribers. Clearly, that decision has been approved, and Netflix will have to wait and see if the decision affects subscriber numbers. In the past, cost increases haven't led to large subscriber cancellations. But this time may be different.
When Netflix last increased prices in January 2019 there was still very little competition in the streaming space. That's all changed now, with Netflix having at least four other major competitors, as listed above. In addition, this latest increase comes at a time when millions of Americans are still out of work due to the pandemic. That combination of other streaming options and lack of funds in many US households may lead to Netflix subscribers cancelling in greater numbers this time around, despite the price hikes only being $1 and $2 respectively.
Source: The Verge