Netflix, the popular streaming service, has once again adjusted its subscription pricing, impacting users in the US, UK, France, and soon in several other countries. This decision was announced during the release of the company's third-quarter earnings results. The move marks another shift in the company's pricing strategy, as it seeks to address ongoing challenges, including a Hollywood actors' strike and increased competition in the streaming industry.
Starting immediately, subscribers in the US, UK, and France using Netflix's Basic plan will witness a price increase, with their monthly subscription rising from $10 to $12. However, it remains unclear whether the number of simultaneous streams and additional member allowances will change for this plan.
It is important to note that the Basic plan is no longer available to new subscribers. Meanwhile, the Premium plan, which offers the highest level of access, will now cost $23 per month. Netflix's ad-supported and Standard plans will remain priced at $7 and $15.50 per month, respectively.
This change comes almost two years after Netflix's last price adjustment, which took place in January 2022. During that time, the company removed the $10 Basic plan for new subscribers and introduced additional charges for sharing accounts with individuals outside the subscriber's household.
“As we deliver more value to our members, we occasionally ask them to pay a bit more,” Netflix writes in its letter to shareholders. “Our starting price is extremely competitive with other streamers and at $6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket.”
Netflix's decision to raise prices mirrors the ongoing trend in the streaming industry. Many of its competitors, including Disney Plus, Hulu, Peacock, Discovery Plus, and Paramount Plus, have all implemented price hikes within the past few months. The new pricing aligns Netflix with the rates of services like Disney Plus and Hulu.
This recent round of price increases signifies a significant shift in the streaming industry. While it was once characterized by low-cost access to an abundance of content, growing economic pressures, increasing content production costs, and heightened competition have led to more expensive subscriptions. The Wall Street Journal has estimated that the average cost of watching a major ad-free streaming service has increased by nearly 25% in just over a year.
Beyond subscription prices, Netflix is diversifying its offerings. The platform has entered the gaming space, launching games on its platform for mobile phones in 2021 and expanding its lineup each month. Furthermore, Netflix is making tentative forays into live sports programming with its inaugural Netflix Cup, combining Formula 1 and PGA athletes in a live golf event set to stream in November.
In its third-quarter earnings report, Netflix revealed a revenue of $8.54 billion, up from $7.9 billion in the year-ago quarter, reflecting a robust financial performance. The net profit rose by 20% to $1.68 billion, demonstrating the company's ability to navigate challenges while maintaining a substantial user base.
While some users may be disappointed by the cost increase, Netflix remains a dominant force in the streaming world, with 8.8 million new subscribers added in the third quarter of 2023, bringing its global total to 247.15 million. It remains to be seen how these adjustments will impact the streaming giant's future growth and competition within the industry.