Your Netflix bill is set to increase once more.
The streaming media company announced on Friday that its plans in the United States and Canada will be priced more.
The regular plan subscription price in the United States increased by $1.50 to $15.49. The basic plan has increased by $1 to $9.99, while the premium plan has risen by $2 to $19.99.
Netflix’s regular plan in Canada has also increased by $1.50 to $16.49 Canadian. The premium plan has increased by $2 to $20.99 in Canadian dollars. Its essential strategy remained the same.
Netflix issued a statement to CNN explaining its decision, which was identical to its statement from October 2020, the last time it raised its fees.
“We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members,” a Netflix (NFLX) representative 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 .”
The price hike comes only a week before the streaming service reports its fourth-quarter profits.
However, the reason behind the company’s decision is straightforward: Netflix has spent billions of dollars on content, and as streaming becomes more important in the entertainment scene, growth slows and recruiting new members becomes more difficult.
Revenue has to come from someplace at that point. It’s simple to gain it by raising prices on customers.
For example, Netflix said in October that it had attracted 4.4 million new customers, bringing its total global subscriber count to 213.5 million, a respectable but not outstanding amount. This came after the company’s performance had been lacklustre for the previous two quarters.
Netflix also claimed 70,000 new customers in the United States and Canada in those earnings. That was an improvement over the second quarter’s loss of subscribers, but only roughly 1 million more than year-ago totals in those countries.
Netflix previously stated that it plans to spend $17 billion on programming in 2021. The company has not yet revealed their spending plans for 2022.
Netflix’s premium plan, which allows for four simultaneous streams and super HD streaming, has been raised by $2 to $19.99 a month in the United States. Netflix’s basic plan, which includes one stream, has increased in price by $1 to $9.99 per month.
The premium plan in Canada increased by $2 to C$20.99, while the basic plan remained at C$9.99.
Netflix’s regular U.S. plan now costs more than competitors, at $15.49 per month. HBO Max, which is owned by AT&T Inc (T.N), is presently running a 12-month $11.99-per-month promotion.
Disney+ from Walt Disney Co. (DIS.N) costs $7.99 per month or $79.99 per year.
With 74 million streaming customers as of September 2021, the United States and Canada are Netflix’s largest region. In the third quarter of 2021, the area contributed for over 44% of the company’s revenue, or $3.3 billion.
The majority of the company’s recent membership growth has come from outside the United States.
Netflix’s subscriber growth slowed after a surge early in the COVID-19 pandemic, but it revived in September because to the global phenomenon “Squid Game,” a dystopian thriller from South Korea. The total number of subscriptions in the world has reached 213.6 million.
When Netflix reports quarterly earnings on Thursday, the business will release its next subscriber report. According to Thomson Reuters I/B/E/S statistics, analysts expect the business to post 8.5 million additional sign-ups from October to December, increasing its global user base to 222 million.
