Netflix Raises Price for Basic and Premium Plans
Wilson Chapman
On the heels of a great summer — for business, if not for (original) content — Netflix is gifting loyal subscribers who remained through the WGA and SAG strikes with a price hike. Starting October 18, prices for the streamer’s “Basic” plan and “Premium” plan will increase for consumers in the United States, the United Kingdom, and France.
In the U.S., the basic plan will increase by two dollars, from $9.99 to $11.99 monthly. The premium plan will increase by three dollars, from $19.99 to $22.99 monthly. The basic plan, which is now unavailable to new subscribers, offers the cheapest non-ad-supported subscription to Netflix. The tradeoffs are its relatively low streaming quality and limited cross-device streaming in exchange. The premium plan is the most expensive and offers Ultra HD picture quality, downloads, and more extensive simultaneous streaming options. The advertising-supported plan, which launched last year, will remain at $6.99. The popular standard plan will remain at $15.49 monthly.
“While we mostly paused price increases as we rolled out paid sharing, our overall approach remains the same — a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more,” Netflix executives wrote in their third-quarter letter to shareholders. “Our starting price is extremely competitive with other streamers and at $6.99 per month in the U.S., for example, it’s much less than the average price of a single movie ticket.”
The price hike doesn’t exactly come as a surprise, but the fact that it’s happening now is — to an extent. Earlier this October, the Wall Street Journal reported that Netflix was planning to wait out the ongoing SAG-AFTRA strike before increasing rates for subscribers. That report, which Netflix did not comment on, came out while talks were still active between SAG and AMPTP for a new contract. At the time, the negotiations appeared to be in a promising place. The talks have since been suspended indefinitely.
The Netflix price increases were announced as part of the company’s July to September earnings report. For the quarter, Netflix added 8.76 million subscribers and posted $3.73 of earnings per share (EPS) on $8.542 billion in revenue, surpassing forecasts. With the price hike, the streamer joins multiple competitors in raising their prices this year, including Disney+, Max, Paramount+, Starz, Shudder, and Peacock.
Netflix stock (NFLX) is currently soaring in after-hours trading.
