Overview of the Price Increase
Netflix Inc. has confirmed that it will increase the prices for most of its subscription plans in the United States and Canada. The company revealed the changes during its earnings announcement on Tuesday, citing a price adjustment of $1 to $2.50 per month, depending on the selected plan. This is the first price hike for Netflix in some time, with the last price increase for its standard plan occurring in early 2022.
The new pricing structure is as follows:
- The ad-supported tier will rise by $1, from $6.99 to $7.99 per month.
- The standard plan will increase by $2.50, from $15.49 to $17.99 per month.
- The premium plan will cost $2 more, going from $22.99 to $24.99 per month. Additionally, the cost for an extra member on an existing account will rise by $1, bringing it to $8.99 per month.
Streaming Price Trends Across the Industry
This price increase is part of a larger trend in the streaming industry, with many other platforms raising their rates over the past year. Warner Bros. Discovery, Paramount Global, and Walt Disney Co. have all made similar moves with their streaming services, including HBO Max, Paramount+, Disney+, and Hulu. Even live programming services such as YouTube TV have become more expensive.
For Netflix, the last significant price increase was applied to its premium plan in late 2023. The ad-supported tier, which had been priced at $6.99 since its launch in late 2022, will also see its first price hike.
Impact of Netflix’s New Strategy
The price hike announcement follows Netflix’s crackdown on account sharing, which began in early 2023. This move required account holders to either pay extra for additional users or ask those users to get their own accounts. At the time, the streaming giant had just launched its ad-supported plan, which gained popularity among password sharers who didn’t want to pay for the more expensive standard tier.
Co-Chief Executive Greg Peters described the $7.99 price point for the ad-supported tier as an “incredible entertainment value,” highlighting that 55% of new sign-ups for Netflix in countries where the plan is available were opting for the ad-supported version. Given the price hikes, many users may consider switching to this more affordable option, as the new $17.99 price for the standard plan is now on par with Hulu’s ad-free plan at $18.99 and Max’s ad-free option at $16.99.
Netflix’s move to raise prices indicates its ongoing effort to balance profitability with the growing competition in the streaming industry.
