The Wall Street Journal recently reported that Netflix is planning to raise its subscription prices, which will affect its high-tier ad-free packages. The price increase will initially only apply to customers in the United States and Canada, while discussions are still ongoing for price hikes in other countries worldwide.
When The Wall Street Journal reached out to Netflix for comment on this matter, the company declined to provide any insights. It is worth noting that Netflix’s most recent price adjustment took place in January 2022, targeting only customers in the US and Canada.
In recent times, major streaming services in the US have been gradually raising their subscription prices. A common strategy employed is the addition of live sports broadcasting to their platforms in hopes of discouraging cancellations. Simultaneously, the price increase mainly impacts ad-free packages, leaving the cheaper ad-supported packages unaffected. This creates a larger discrepancy, motivating viewers who wish to avoid paying extra to switch to ad-supported packages instead. Interestingly, multiple streaming services have found that their average revenue per viewer is higher when they monetize through advertising.
It is expected that Netflix will evaluate the price adjustment following the recent end of the SAG-AFTRA strike, as the Writers Guild has now also settled their strike with a potentially more beneficial agreement. It is likely that the Screen Actors Guild will negotiate in a similar fashion.
TLDR: Netflix plans to raise subscription prices, initially affecting high-tier ad-free packages in the US and Canada. This follows a trend among major streaming services to increase prices and add live sports programming, resulting in viewers switching to the cheaper ad-supported options. The recent labor strikes in the entertainment industry may further impact future pricing decisions.