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Netflix will be increasing standard and premium monthly subscriptions -effective immediately for new members- to make the streaming site more efficient and bring value to its customers.
The new price hike includes an extra $1 for the standard plan, which was originally $13, and the premium plan will increase $2 from its original price of $16. New Netflix members will be charged these monthly fees automatically, while current members will be informed in the next billing cycles about upgraded prices.
Ever since Netflix launched in 2007, the site has provided streaming services for a wide variety of award-winning television shows, documentaries, movies and more with a monthly cost of $18. As years went on and subscribers signed up, the price decreased and then increased as more services and plans were added. According to Flixed’s Alex Munkachy in June 2019, “Even though the new subscription structure lets customers access streams for one dollar less, the move wasn’t really a price reduction for most Netflix subscribers. Many ended up paying more because, at the time, many titles were only available in DVD format. To get full access to the Netflix catalog, subscribers had to pay a minimum of $16/month for the ‘one DVD at a time’ plan and the new $8/month streaming plan. For two DVDs at a time, subscribers had to pay $2 more each month.”
During the COVID-19 pandemic, millions of people were forced to stay home and entertain themselves, often watching movies or streaming shows on netflix. As a result, millions of new members created a subscription for the streaming service. According to Forbes’ Joe Walsh, “By comparison, the service added 15.77 million subscribers in the first three months of 2020 and 10.09 million between April and June, giving the company its biggest growth spurt in history as viewers turned to streaming services while stuck at home.”
Since a second wave is predicted to occur in many parts of the United States and world, the question becomes, will people be reluctant to continue their membership if the prices increase? As established, Netflix frequently changed the prices of plans, but subscribers were not fazed by the change. According to Flixed’s Alex Munkachy in June 2019, “However, CNBC suggested that the response to this price change was not as negative as the response to the 2011 subscription fee increase. One Netflix fan even tweeted that he had ‘zero problem’ with paying $2 more because he felt that Netflix’s original content alone was worth it.”
To accommodate for the price raise, Netflix will be expanding their features and adding products to make the experience for users better, while creating a large amount of new content. According to The Verge’s Julia Alexander, “Netflix has increased its annual content budget every single year over the last seven years, spending a once estimated $18.5 billion in 2020 alone, though that may have changed this year due to the pandemic.”
With the continuous amount of advancement of Netflix’s streaming service, competition might grow among other streaming sites causing more prices to rise.
