Netflix Planning Another Big Price Hike Very Soon
Sources say Netflix intends to raise prices when the actors' strike is over, but so far the company hasn't publicly commented on the story.
Netflix is reportedly planning on raising prices once again. On Tuesday, insiders told The Wall Street Journal that Netflix intends to raise its prices a "few months" after the SAG-AFTRA strike ends. With the writers' strike over and negotiations for the SAG-AFTRA strike underway, that price hike could be coming very soon.
The WSJ report says that Netflix plans to raise its prices in "several markets globally," including the U.S. and Canada. Netflix declined to comment on the report, so the news hasn't been confirmed or denied. Insiders did not say what those new prices might be, but Netflix already has some subscribers at their wits' end with frequent price increases. Right now the service starts at $6.99 per month for the ad-supported plan, $15.49 per month for the "Standard" plan and $19.99 per month for the "Premium" plan.
The last price increase came last year, but there have been plenty of pricing changes since then. For one thing, Netflix got rid of its "Basic" plan – a $9.99 per month plan that had no ads, but was otherwise streamlined for single users. This effectively forced many subscribers to choose between a price increase, ad breaks or cancellation.
Meanwhile, the company's most controversial move was a new policy on password-sharing. The app now uses IP address identification and geo-location to track where users are logged in from. If their account is used from outside of their established home for more than two weeks, they will be prompted to pay an additional fee for an extra user. If they decline, they will be logged out of the other location.
A price increase could be a response to the new terms established by the Writers Guild of America. Under its new deal with Netflix, feature film writers will see a pay increase of 18 percent and a 26 percent increase in residual checks. Presumably, actors will be asking for similar terms in the SAG-AFTRA negotiations. However, according to the WGA, all of its demands amounted to just 0.2 percent of Netflix's annual revenue, so it is unlikely to be the main contributing factor in a price hike.
Perhaps more importantly, the WGA won access to streamers' viewership data in this negotiation. That means writers will be able to see how profitable their work was, setting them up to better negotiate fair contracts moving forward. If that kind of data is more widely available, the perceived value of streaming services may change.
Right now, Netflix is available at the prices listed above, with a small discount for subscribers who pay annually rather than monthly. Netflix has not commented on reports of a price increase.