Netflix Raises Its Subscription Fees In Canada And The US
In addition to paying a little extra for that takeout for two, you may have to pay extra to enjoy a night of 'Netflix and Chill.' The multi-billion dollar company created in 1997, Netflix Inc., had released on January 14, 2022, that they have decided to raise its subscription price by $1 to $2. The streaming service, which has also become a production company, said the reason for the increase is to help in purchasing new programming and to "continue to offer a wide variety of quality entertainment options," as stated by a Netflix spokesperson. However, no statements have yet been given by the company's co-founder, Reed Hastings.
According to reports from the Wall Street Journal, the monthly financial plan rose by $1 for customers using the basic plan, from $8.99 to $9.99, its standard plan increased from $$13.99 to $15.49, and the premium plan jumped $2 to $19.99 from $17.99. Canada followed suit as well with the increase, as their standard plan rose from $14.99 to $16.49. And while this may be the case for Western countries, the opposite took place in India last December, where subscription prices for the new users were slashed to as low as $1.95 per month.
But why the contrasting moves by the broadcast streaming giant? The last time the company increased its subscription price was in October 2020 which came as a result of their customer subscription projections being off in the annual third quarter during Covid-19, which caused a financial hit to the company. This was also due to a rise in competitors in the streaming market.
Such is the case once again, and the increases are just a reflection of Netflix's efforts to keep their subscribers attracted as viewers have more options to choose from when seeking content to watch, such as Walt Disney Co.'s Disney +, Amazon Inc.'s Prime Video, Paramount +, Walt Disney Co.'s Hulu, and AT&T's HBO Max. These streaming companies are investing billions into upgrading their services to rival Netflix, and it shows in the number of users. And as mentioned earlier, competing for streaming services was also the reason for the customer prices being lowered in India as a contrasting strategy to keep their customers.
What's more is that customers are willing to accept the price increase, as Netflix has since received a batch of new subscribers. According to a report from Reuters, Evercore ISI analyst Mark Mahaney stated, "This is evidence that Netflix has pricing power." Meaning that, despite Netflix now being the highest-priced streaming service in the world, customers are willing to comply and pay the extra fee.
Despite the drop in momentum after a surge at the start of the pandemic, Netflix Inc.'s subscriptions reached 213.6 million after the South Korean Squid Game was introduced. Throughout the month of October and December, analysts predicted 8.5 million subscribers to be added, bringing the global subscriber count to 222 million by the end of 2021.
NEXT: Driven By Success: Netflix Pays Company CEOs Hastings And Sarandos Over $35 Million Each
Sources: Reuters, The Wall Street Journal
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