What just happened? Just because you know something bad is coming doesn't make its confirmation any less disappointing. Reports that Netflix has been planning another price hike have now been confirmed after the company announced it was raising the cost of some plans in the US, UK, and France.
Earlier this month, the Wall Street Journal wrote that Netflix was planning to raise its prices once again. The streamer implemented its last hike in January 2022, though it did stop offering the Basic $9.99 ad-free plan to new and returning customers in July, meaning the cheapest commercial-free tier for newbies went up to $15.49 per month.
Starting today, Netflix is raising the price of both the Basic and Premium plans in the US, UK, and France. Those members still on the Basic plan will start paying $11.99, marking a $2 increase, while the Premium tier jumps from $19.99 to $22.99. UK subs will now pay £7.99 and £17.99 for Basic and Premium, respectively, while French prices are 10.99€ and 19.99€.
The prices of Netflix's $6.99 ad-supported plan and the $15.49 Standard tier remain unchanged.
The latest increase means that Netflix's Premium tier has increased 91.7% since 2015, when it was just $11.99.
"As we deliver more value to our members, we occasionally ask them to pay a bit more," Netflix wrote 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."
As per The Hollywood Reporter, Netflix Co-CEO Greg Peters would not comment on when the company might raise the prices of the ad-supported and Standard plans. He said the timing will fit into the company's "philosophy" of "occasionally" raising prices to continue delivering better content.
Some had predicted that Netflix's password-sharing crackdown would result in a mass exodus of subscribers, but the streamer says the move has been "exceeding" expectations. It added 8.76 million new subs over the past few months, pushing its worldwide total to 247.15 million.
"The cancel reaction continues to be low, exceeding our expectations, and borrower households converting into full paying memberships are demonstrating healthy retention. As a result, we're revenue positive in every region when accounting for additional spinoff accounts and extra members, churn and changes to our plan mix," Netflix stated.
Netflix's ad-supported plan has also been a huge success, with membership increasing almost 70% from the previous quarter. It's also the tier that 30% of new signups opt for in the 12 countries that offer it.
Netflix reported that the SAG-AFTRA and WGA strikes had resulted in about $1 billion in "lower-than-planned cash content spend" during the last quarter, but the company still generated revenue of $8.5 billion, up 8% year-on-year.
It'll certainly be interesting to see how many people leave Netflix permanently following this latest price rise. It has plenty of enticing content coming up, but perhaps more people will start canceling their subscriptions and rejoining temporarily when new seasons of shows like Stranger Things and One Piece arrive.