Netflix recently announced its latest price hikes alongside third quarter earnings results. Despite the ongoing actors' strike, the streaming giant has increased subscription costs for two of its plans.
Subscribers on the $9.99 per month Basic plan will see an increase to $11.99, while those on the Premium plan, previously priced at $19.99 per month, will now pay $22.99. The ad-supported plan and the Standard tier remain unchanged in price. The Basic and Premium plans in the UK and France will also experience price increases, with the ad-supported and Standard plans maintaining their current prices.
"As we deliver more value to our members, we occasionally ask them to pay a bit more," Netflix stated in a letter to shareholders. Netflix emphasised the competitiveness of its cheapest plan: “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 experienced its best subscriber growth in years, reporting a 9% year-over-year increase in paid memberships. Their subscriber count swelled to 247 million, well above the 243.8 million projected by analysts. This growth can be partly attributed to the successful password sharing crackdown, as borrower households started converting into full paying memberships. Another contributor is the ad-supported plan introduced last year. Netflix reported a 70% growth in ad-tier subscriptions from the second quarter.
Netflix is introducing a host of new shows in the coming months, which might make existing members more agreeable to the price increase. Squid Game: The Challenge is a reality TV show based on the popular Korean drama, and will premiere on November 22. The show will see 456 participants compete in a series of high-stakes children's games for the top prize of $4.56 million. Netflix is also be hosting its first ever live sports event. The Netflix Cup is a golf event where PGA Tour golfers and Formula 1 drivers will team up to compete in a match play tournament in Las Vegas.
The impact of the price increase on subscribers remains to be seen. Some may consider the adjusted prices reasonable, considering the value and content provided by Netflix. However, others may be discontent and consider alternative streaming platforms.
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