Netflix Price Hike in UK Increases Standard Plan to £9.99, Premium Plan to £13.99 a Month
Starting today, Netflix will be increasing the price of their plans for U.K. subscribers. Their Standard tier will increase to £9.99 a month (currently £8.99), while their Premium tier jumps to £13.99 (currently £11.99). Their Basic tier will remain £5.99 a month.
New subscribers will see the price hike immediately, while current subscribers will see it on their next billing cycle.
The Basic tier offers streaming on a single device in SD, while their Standard tier offers HD streaming on two devices, and their Premium tier offers 4K streaming on up to 4 devices.
The increase follows a similar price hike in the U.S. that saw a $1 price hike on the Standard Plan and $2 on the Premium Plan.
When evaluating price hikes, COO Greg Peters says is because of the additional value created for members.
Netflix expects to spend $1 billion on UK productions in 2020. That’s more than double the $500 million they spent on 50 films and series in the region in 2019.
Peters said there is “no magic algorithm” when it comes to price hikes, but the “the core model we have…is to take the money that our members give us…and invest that as judiciously as smartly as we can…and when we deliver more value to our members, we’ll occasionally go back and ask those members to pay a little bit more to keep that virtuous cycle of investment and value creation going.”
Peters said that the company evaluates price hikes at the country-level, so just because one country saw a price hike doesn’t necessarily mean another one would. Some factors include popular titles in that country, upcoming slate, engagement and churn in those markets. But ultimately Peters said that they want to remain an “want to remain an incredible value as we continue to improve the service and grow.”
But given that “the number of original productions that we’re doing is increasing…if we do that then we feel like there is that opportunity to occasionally go back to our members where we’ve delivered that that extra value in those countries to pay a little bit more.”
Jefferies analyst Brent Thill estimates that Netflix would be in the position to add $500 million to $1 billion in extra sales in 2021 by just raising prices $1-2 in its major markets, according to a report on Yahoo Finance.