In their sixth price increase since 2014, Netflix announced an increase in subscription prices for US and Canadian subscribers, ranging from $1 to $2 per month. This makes them the most expensive subscription-based streaming video platform except for those that have a live TV component (e.g., Hulu + Live TV, YouTube TV). The next highest streaming service in terms of price is HBO Max at $14.99 a month (currently discounted to $11.99 a month) for the ad-free tier and $9.99 a month (currently discounted to $7.99 a month) for the ad-supported tier.
On Netflix’s Plans and Pricing page, Netflix announced their newest subscription prices. For new customers, these prices will begin immediately; existing members will get an email notification 30 days before their prices change. With these streaming plan increases, Netflix’s basic plan will cost $9.99 per month, a $1 increase; their standard plan will cost $15.49 per month, a $1.50 increase; and their premium 4K plan will cost $19.99, a $2 price increase. Taxes may be added depending on where subscribers live. In Canada, the basic plan will be $9.99 per month, the standard plan will be $16.49 per month, and the premium plan will be $20.99 per month, TechDaily reports.
IGN says this is par for the course for Netflix, as they have been raising their prices $1 or $2 every two years or so, depending on the plan. Netflix’s first price increase was in 2014, where they raised their plan from $7.99 per month to $8.99 per month. The Verge reports that Netflix was so worried about losing subscribers over that increase, that it let existing members keep their $7.99 price for two years. The streamer’s last price increase was announced in November 2020.
“We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members,” a Netflix spokesperson said. “We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always we offer a range of plans so members can pick a price that works for their budget.”
The increase in subscription prices may come as a surprise for some, but with other streaming services announcing their content budgets, Netflix still needs to fight for some airtime. While Netflix has not disclosed their 2022 spending budget, they announced that they would spend $17 billion on content in 2021. For comparison, Disney reported that they would be spending $33 billion on content for 2022.
Following the news of the price increase, Netflix’s stock rose roughly 2%, CNN Business reports. Netflix has not announced their fourth quarter earnings yet, but they are scheduled to do so this Thursday, January 20. As of October 2021, Netflix said it had added 4.4 million subscribers, and their global subscriber total was 213.5 million. There are 74 million members in the US and Canada, making this a lucrative price increase for Netflix.
Netflix was not the only streaming service that raised their subscription prices in recent months. Hulu raised their monthly price by $1 per month for their ad-supported and ad-free streaming tiers. Disney Plus also went up a dollar a month at the beginning of 2021.
Despite the many “best streaming service” lists various media outlets provide each year, Netflix is almost always at the top of the list as the best service overall or for the best content. This, of course, depends on the outlet and the lists are hard to rely on because many of the media outlets earn commissions on affiliate links in the articles.
Regardless, based on subscriber numbers alone, Netflix is the clear leader in the streaming world. Except for price-sensitive subscribers, we don’t expect this to have a major impact on retention. Netflix was already the most expensive service without a live TV component, and price-sensitive subscribers can still access the basic plan for just under $10 a month without having to go to an ad-supported tier. While no one likes to see prices increase, prices of virtually are going up. Netflix was just the first streaming service to raise their prices in 2022. Others may follow suit.