Netflix is marching ever closer to the 100 million worldwide subscribers milestone, partly helped by its commitment to original content such as Orange is the New Black, House of Cards, and many others. But will the streaming service need to up its prices to help pay for all these high-budget shows?
In Australia, the company has already tested a price hike for select customers, with some paying up to 20 percent more for the service. According to The Australian, the Basic plan increased from AU$8.99 to AU$9.99 per month, while the Standard plan jumped AU$2 to AU$13.99 per month. The Premium monthly plan saw the biggest leap, up from AU$14.99 to AU$17.99.
Netflix confirmed the tests had taken place, but stressed nothing was set in stone. "We continuously test new things at Netflix and these tests typically vary in length of time," the company said in a statement. "In this case, we are testing slightly different price points to better understand how consumers value Netflix. Not everyone will see this test and we may not ever offer it generally."
Some publications reported that Netflix was considering price increases that would only come into effect on weekends, with prices returning to normal on Monday through Friday, but a spokesperson said this wasn’t the case. "These tests vary in length, they are not weekend only," they said.
The potentially bad news for Australian residents, but good news for the rest of the world, is that Netflix may only be considering permanent price rises down under. The so-called “Netflix tax,” which comes into effect on July 1, sees the federal government extend its 10 percent goods and services tax to cover “intangible supplies” such as streaming services like Netflix. It seems the company is planning to pass the bill onto its customers by upping costs in the country.
With a budget of $6 billion for over 1000 hours of new content this year, along with its continued expansion into new locations, Netflix will eventually consider another US price rise to be necessary. But with 30 percent of customers saying they wouldn’t pay a dollar more for their current subscription, the company may hold off on any subscription hikes for a while.