Netflix is introducing price increases for its subscribers in the United States today, increasing its standard plan to $ 14 per month and the premium level to $ 18 per month.
The new pricing for the standard plan is a price increase of $ 1 (from $ 13 per month), while the new premium price is an increase of $ 2 (from $ 16 per month). New subscribers will have to pay the updated monthly fees, while current subscribers will see the new prices over the next few weeks as they enter with customer invoices.
Industry insiders have long been expecting a new round of price increases on Netflix, which last increased subscription fees in the United States in January 201
Rising prices also come at a time when people have more opportunities for entertainment than ever before – especially in the United States. A few years ago, Netflix’s biggest competition in the streaming space was Hulu, and the company competed for the attention of people separated to play video games, watch YouTube and sleep. Now only the US has HBO Max, Disney Plus, Peacock, TikTok, YouTube, Twitch and Fortnite. Oh, and sleep is still a factor. Netflix is aware of this. Prices are being updated “so we can continue to offer a greater variety of TV shows and movies,” a spokesman said. On the edge.
“As always, we offer a set of plans so that people can choose the price that best suits their budget,” the spokesman added.
The price increase is also coming as Netflix seeks to invest more heavily in product content and features. Netflix has increased its annual content budget every year for the past seven years, spending approximately $ 18.5 billion in 2020 alone, although that may have changed this year due to the pandemic. Increased competition means that Netflix must constantly strengthen its game to ensure that it has both quality content and a lot of it, while working to improve the actual platform. This costs money and as a result prices rise.
Questions about the price increase arose during Netflix’s last call for revenue this month. Greg Peters, chief operating officer and chief product officer of Netflix, said that as the company invests more in both content and technology, they “will come back from time to time and ask [customers] pay a little more to maintain this virtuous cycle of investment and value creation. “Although Netflix is not affected by competitors’ prices, according to a person familiar with the matter, its new standard price is only $ 1 lower than HBO Max’s $ 15-a-month fee – a fee that many analysts say is too high for consumers.
At the time, analyst Ross Benesh, who covered Netflix eMarketerhe said On the edge that Netflix is still underrated. He added that people get “great value for not much money”. Due to all these different factors, and with Netflix becoming an even more central streaming service in people’s lives during the pandemic, Netflix may want an extra dollar a month and people will pay.
“Some people may give up, but I bet it will pay off,” Benes added.
Netflix executives like co-CEO Reid Hastings have also reconciled, losing some customers – something the industry calls weaning. Hastings told analysts during a conversation about the company’s earnings in the second quarter of July that people could leave Netflix from time to time to subscribe to other streamers. However, the goal was “to have so many visits that you know that when you get to Netflix, you can just go from punch to punch to punch and never have to think about any of these other services.” from hits that persuade people to sign up and stay, it’s expensive – fast – and that’s partly where prices go up.