Breaking: Netflix Reportedly Planning to Raise Prices Soon
Breaking: Netflix Reportedly Planning to Raise Prices Soon
Death, taxes, and streaming services raising their prices. Those are about the only things that you can count on in today’s ever-changing world. Now, a report from the Wall Street Journal indicates that the world’s largest streaming service might be the next platform planning a price hike. WSJ’s Jessica Toonkel and Sarah Krouse are reporting that Netflix will be raising its prices in select markets — including the United States and Canada — in “a few months.”
The report from Toonkel and Krouse didn’t indicate by how much Netflix is planning to increase subscription prices, or in what regions the change would take place. The company’s last reported subscriber total puts its customer base at 238.29 million. However, simply adding subscribers is no longer the end goal for the vast majority of streaming services. As the industry approaches maturation and economic conditions change around the world, companies are instead focusing on average revenue per user (ARPU), meaning that they are modifying their strategies to make more money per user as regularly as possible.
While Netflix technically hasn't raised its prices since January 2022, the streamer did eliminate its lowest-cost ad-free plan over the summer in an effort to push new customers to either the more expensive Standard tier or to the cheaper (but more profitable) Standard with ads option.
In July, the company’s CFO Spencer Neumann stated that there would be no price increases until at least 2024, so if the WSJ’s reporting is correct, and Neumann keeps his word, we could see the streaming giant jack up rates when the calendar flips to January.
The other major area in which Netflix is attempting to generate increased revenue is in its efforts to crack down on password sharing. The streamer had been testing its new sharing rules internationally for nearly a year before bringing them to Canada and the United States earlier in 2023. Unsurprisingly, the initial response to the changes that aim to prevent people outside the home of a Netflix account holder from using the service were highly negative. However, Neumann indicated that the results of the efforts had been highly positive, and that the vast majority of increased revenue globally would come from transitioning these users to some sort of paid account.
Netflix is far from the only streamer looking to increase revenue by upping the price of a subscription. Next week, all three of the Disney services — Disney+, ESPN+, and Hulu (including Hulu + Live TV) — will see upwards of a 27% rate hike. These types of moves are not only driven by the need to satisfy stockholders who demand to see increased revenue every month, but also by the fact that many services intentionally kept their prices down in order to attract as many customers as possible, luring them away from traditional cable and satellite TV packages.
Now that consumers have integrated streaming into their daily entertainment routines, it is time for the platforms to start inching prices up to levels that are more financially beneficial. Analysts believe that nearly all of the premium streaming services have room to increase prices without losing too many subscribers. If that’s the case, cord-cutters can expect a steady stream of similar announcements for the foreseeable future until some other industry-disrupting option becomes available and we start the cycle over with incredibly inexpensive, subscriber-acquisition prices.
Netflix
Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”