Netflix cites “more entertainment choices than ever,” raises prices again – Ars Technica
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Sam Machkovech – Jan 14, 2022 10:52 pm UTC
On Friday, Netflix confirmed plans to raise prices for its video-streaming services in North America for the seventh time in 11 years.
Unlike many previous Netflix price hikes, this year’s bump hits all three subscription options. In the United States, the “basic” tier, which is capped at 720p and includes other limits, receives its first increase in three years, jumping $1 to $9.99 per month. The 1080p “standard” tier goes up $1.50 to $15.49 per month. And the 4K “premium” tier jumps $2 to $19.99 per month. Canadian customers can expect similar jumps in prices for all three tiers as well.
Netflix says the price increases will roll out in phases to existing customers based on their billing cycles, and all customers will get no fewer than 30 days’ notice before the higher prices go into effect. Brand-new customers must begin paying the higher prices immediately.
In a statement given to various outlets, a Netflix representative offered a curious explanation for the price hike. “We understand people have more entertainment choices than ever, and we’re committed to delivering an even better experience for our members,” the statement said. “We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always, we offer a range of plans so members can pick a price that works for their budget.” (Ars Technica asked Netflix representatives questions about the announcement but did not receive an immediate response.)
That explanation reminds customers about the growing selection of affordable streaming options available in North America. As of press time, the following popular streaming services all cost less per month than Netflix’s $15.49-per-month “standard” 1080p tier: Amazon Prime Video, Apple TV Plus, Disney Plus, HBO Max, Hulu, Paramount Plus, and Peacock. Nearly all of those include 4K viewing options by default for no additional fee (Peacock remains the 4K exception on that list).
In terms of exclusive content, Netflix has been bullish on both producing its own films and series and signing big-ticket deals with popular content producers. In its biggest 2021 licensing deal, Netflix secured the exclusive streaming rights to Seinfeld for five years at a reported cost of over $790 million. This comes as other streamers open their pocketbooks to lock down their own exclusive licensed film and TV libraries.
Netflix is in a position to weigh the pros and cons of price increases at any time, given how much data it has already accumulated about subscriber drop-off after any of its prior hikes. The first true “hike” to its streaming service came in 2011, when Netflix stopped offering a combination bundle of physical DVD rentals and streaming access to US subscribers for $9.99. Instead, customers were told at the time that they could access each service separately for $7.99 a pop. (Physical DVD and Blu-ray rentals are still available for Netflix users in the US, with $9.99-per-month or $14.99-per-month options.)
In the years since that decoupling, Netflix has delivered a mix of new tiers and price increases to those tiers, with its “premium” plan going live in 2013 at $11.99 per month and its “basic” plan emerging as a lower-fidelity option in 2014—at the same time that its “standard” plan rose to $8.99 per month. Ars Technica previously covered Netflix price increases in 2017 and 2019 (but not 2015), and we published a report about Netflix’s subscriber drop-off in 2021, which could have been due to a 2020 price hike, a changing streaming consumption pattern as the pandemic temporarily eased, more streaming competition, or other factors.
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