Updated on August 28, 2022
Late last week, Netflix released without warning news of a price hike for the popular streaming service. Prices for all tiers are going up, in the first Netflix price hike since October 2020.
Netflix’s new price tiers are as follows:
- Basic: $9.99 (up from $8.99); streaming to one screen at a time, 480p (standard definition) picture quality.
- Standard: $15.49 (up from $13.99); streaming to two screens at a time, 1080p (high definition) picture quality.
- Premium: $19.99 (up from $17.99); streaming to four screens at a time, 4k (ultra high definition) picture quality.
The new prices go into effect immediately for new customers, or with a 30 day notice for current customers.
Prices are also going up for Canadian Netflix customers; in Canada, Netflix will go from $14.99 to $16.49 for the standard plan, and from $18.99 to $20.99 for the premium plan. (The basic plan stays unchanged at $9.99.)
As the Verge notes, Netflix has repeatedly raised prices over the years; a chart shows that the standard plan (the most popular tier) has basically doubled since 2011, when it was $7.99.
Netflix’s standard tier’s new price point now makes it the most expensive on-demand streaming service. For a long time, HBO Max held that “honor,” at $14.99 for its ad-free tier, which always felt pricey. Netflix’s new price point now clocks in at 50 cents higher than HBO Max. (Not helping Netflix’s news is that HBO Max is currently running a 20% off promotion.)
Pros of the Netflix price hike
On the one hand, I can see why Netflix raised its prices. Unlike HBO Max, Disney+, Paramount+, and other services, Netflix is run by… Netflix itself, as an independent company. It’s not owned by a massive media conglomerate (like HBO Max or Disney+), a cable company (like Peacock), or a tech giant (like Amazon Prime Video or Apple TV+). As such, Netflix needs to produce its own material, especially since it’s lost some movies and TV shows to companies starting their own rival services. And producing such original programming isn’t cheap; Netflix’s content budget for 2021 was $13.6 billion.
Netflix also has more obstacles in raising funds. They can’t just churn out a “Star Wars” or Batman movie, rely on a theme park, push a new line of smartphones, or raise customers’ cable/broadband rates. Thus, $15.49 for Netflix might look a bit more understandable than $14.99 does for HBO Max (which is owned by a giant media conglomerate, one set to get even bigger).
Finally, Netflix’s subscriber growth has slowed down (as Wall Street is well aware), so it can’t rely on new customers as much as it once did.
Cons of the Netflix price hike
On the other hand, the above doesn’t change the fact that thanks to the price hike, Netflix is now pretty steep, and the most expensive streaming service. (I’m also wondering why they chose $15.49 as a price point, versus just going up to $15.99 outright.) At $15.49 a month, Netflix is now less of a “no brainer” than it was back in 2011, especially now that there’s a lot more competition.
Depending on your point of view, other services also might provide more value for their prices than Netflix: Amazon Prime (at $13/mo.) offers free two-day shipping and other services; Paramount+ (at $10/mo. for the ad-free tier) offers streaming of your local CBS affiliate; and the Disney+ bundle (at $14/mo.) offers Hulu and ESPN+. Meanwhile, Netflix’s cheapest tier (at $10/mo.) is 480p, which no other streaming service offers (for good reason). Given all that, it’s understandable if someone does decide to cancel Netflix, and go with a rival service instead.
Still, despite its price hike, Netflix is popular for several good reasons. Netflix offers a large variety of programming covering pretty much all genres; they’ve won numerous awards for their TV shows and movies; Netflix serves as a catch-all platform that isn’t tied to only a specific tech company or media conglomerate; and Netflix is available on pretty much every platform. Netflix also has the largest user base of all the streaming services, with 214 million customers; its nearest rivals are Amazon Prime Video, with an estimated 175 million customers, and Disney+, with 118.1 million customers.
Whether all this is enough to let Netflix stay on top remains to be seen. Netflix may need to be more competitive price- and/or feature-wise, given it’s not just competing with Hulu and Amazon Prime Video anymore.
“Netflix”by stockcatalog is licensed under CC BY 2.0 (Flickr / cropped from original)