- Your Netflix subscription will cost a little more, thanks to a new price increase from the streamer that hikes the cost of two of its three monthly plans.
- Everyone had been expecting an imminent Netflix price increase, though it comes at an interesting time — when the streamer seems to be cancelling more shows than ever.
- The increases only amount to an extra $1 or $2 per month for Netflix subscribers, but it’s the latest in a series of price hikes over the past few years.
Thanks to a new price hike announced today, your Netflix subscription is about to get more expensive. To be more specific, it’s a price hike hitting US subscribers, and it represents an increase to the price of two plans — the standard plan, which will now cost $14/month (a $1 increase), and the premium tier, which will now cost $18/month (a $2 increase).
If you aren’t a current Netflix subscriber, you’ll start at the higher rate, while existing subscribers will see the increase in tandem with their next billing cycle. Interestingly, this comes almost exactly a month to the date after we reported that a Netflix price hike seemed imminent, and we noted at the time that a hypothetical $1 or $2 estimate (which turned out to be the case today) on users’ monthly bills in North America or Europe could rake in an estimated $500 million to $1 billion in fiscal 2021 revenue for Netflix.
A Netflix spokesperson told The Verge today that the price increase “in the US does not influence or indicate a global price change … As always, we offer a range of plans so that people can pick a price that works best for their budget.”
As is well known, Netflix doesn’t sell ads to businesses and insert those ads into its mix of content, which leaves subscriber fees as its revenue source — and that’s a fact which guarantees that users’ monthly bills will slowly but surely continue to rise over time. Speaking of that inevitability, the last time US subscribers were given a Netflix price increase was back in May of 2019 (which was the fourth such increase since 2010).
Netflix doesn’t need the money, as its balance sheet is plenty expansive, but it will certainly put the revenue to work by investing in more content to fund the virtuous cycle at the heart of the company’s business model. Spend heavily on great content, which entices more subscribers, which brings in more money, which can be spent on more content, and so on and so on.
It will be interesting to see if this new increase dents the company’s subscriber base to some degree, though, because it comes at a time when the conventional wisdom is that the cancellation axe keeps being swung mercilessly at the streamer, something that increased costs associated with COVID-19 has only accelerated. How many of you were flummoxed, for example, when you heard that the Hilary Swank-led Netflix series Away was cancelled earlier this month?
Here’s a sampling of the reaction from Twitter to the latest price increase:
We’ve had @netflix since 2011, and it was a factor in cutting the cable. In that time, we’ve watched the heck out of it, so it’s been good value.
I am struggling with the increase to $15/month. That’s almost twice the price we signed up for, but is it twice the value? 1/3
— Geoff Sowrey (@sowrey) October 28, 2020
NETFLIX:
Netflix's price increase IS justifiable from a business perspective – especially with all the new streaming entrants in the market.
BUT
To make it worthwhile from a consumer standpoint, Netflix seriously need to STOP cancelling and capping shows.
— Jack (@JackTweets44) October 29, 2020
Another Netflix price increase. Fun times. 🙄🥴
— Kat Morrisey (@KatMorrisey) October 29, 2020
