Netflix, the world’s largest streaming service, is reportedly planning to increase its subscription prices in several markets, starting with the U.S. and Canada. The price increase is expected to come a few months after the end of the ongoing Hollywood actors’ strike, which could be in the coming weeks.
The Wall Street Journal quoted people familiar with the matter as saying that Netflix is considering a price increase in some of its largest markets but did not reveal by how much or when the increase will take effect. Netflix declined to comment to the Journal.
Netflix’s last price increase took place in January 2022, when it raised its standard plan from $14 to $15.49 per month and its premium plan from $18 to $20 per month. In June 2023, Netflix also discontinued its basic plan, which cost $9.99 per month and offered ad-free streaming. Instead, it introduced a new ad-supported plan for $6.99 per month, which has nearly 5 million monthly active users, according to Jeremi Gorman, Netflix’s president of global advertising.
Netflix’s price increase comes at a time when the streaming industry is facing rising costs and competition. Netflix must pay higher fees to writers and actors as part of new agreements with the Writers Guild of America and the Screen Actors Guild, which are still being negotiated. Netflix must also invest heavily in original content to compete against rivals such as Disney+, Hulu, HBO Max, Amazon Prime Video, and others.
Netflix has over 200 million subscribers worldwide, but its growth has slowed down in recent quarters. It added just 1.5 million new subscribers in Q2 2023, missing its own forecast of 3.2 million. Netflix blamed the pandemic for delaying some of its popular shows and movies, as well as increased competition and saturation in some markets.
Netflix’s chief executive Reed Hastings said he is not worried about the price sensitivity of his customers, and that he believes Netflix offers a great value proposition. He has also said that Netflix’s goal is to make the best content possible, not the cheapest. However, some analysts and consumers have expressed concerns that Netflix is becoming too expensive and losing its edge over other streaming services. Some have also criticized Netflix for canceling some of its shows prematurely or without an appropriate ending.
Netflix’s price increase could lead to more users switching to cheaper or free alternatives such as ad-supported streaming platforms or piracy sites. According to a recent survey by Hub Entertainment Research, 37% of U.S. consumers would leave Netflix if the company raised its prices by $1 per month, while 14% of respondents said they would leave Netflix if the company added more advertising.
Netflix’s price increase could also impact the company’s expansion plans in emerging markets, where it faces greater challenges in affordability, accessibility, and local content. Netflix has experimented with different pricing models and features in countries such as India, Brazil, Turkey, and Indonesia, including mobile-only plans, prepaid vouchers, and downloads.
Netflix’s price hike could be a risky move for the streaming giant, but also a necessary one to maintain its profitability and quality. Whether loyal Netflix fans will stay with the company or look for other options remains to be seen.