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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 hike hits all three subscription options. In the USA, the “basic” tier, which is capped at 720p and includes other limits, receives its first increase in three years, from $1 to $9.99 per month. The “standard” 1080p level increases from $1.50 to $15.49 per month. And the “premium” 4K tier goes from $2 to $19.99 per month. Canadian customers can also expect similar price increases for all three tiers.
Netflix says the price increases will be rolled out to existing customers in phases based on their billing cycles, and all customers will be given at least 30 days notice before the higher prices go into effect. Brand new customers should start paying the higher prices immediately.
Pay more for “an even better experience”
In a statement given to various outlets, a Netflix representative offered a curious explanation for the price hike. “We understand that people have more entertainment choices than ever before, and we are committed to providing an even better experience for our members,” the statement read. “We are 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 choose a price that suits their budget.” (Ars Technica asked Netflix representatives about the announcement but did not receive an immediate response.)
This explanation reminds customers of the growing selection of affordable streaming options available in North America. At press time, the following popular streaming services all cost less per month than Netflix’s “standard” 1080p tier at $15.49 per month: Amazon Prime Video, Apple TV Plus, Disney Plus, HBO Max, Hulu, Paramount Plus and Peacock. Almost all of these include 4K viewing options by default at no extra cost (Peacock remains the 4K exception on this list).
In terms of exclusive content, Netflix has been bullish both in producing its own movies and series and in signing big deals with popular content producers. In its biggest licensing deal of 2021, Netflix has secured exclusive streaming rights to Seinfeld for five years at a reported cost of over $790 million. It comes as other streamers open their wallets to lock down their own libraries of exclusively licensed movies and TV.
The company’s Friday statement leaves out Netflix’s other unique selling point: an exclusive and growing library of games for iOS and Android devices. So far, Netflix has simply dabbled in this market, rolling out a selection of simple, family-friendly smartphone games, all of which are free of microtransactions and ads. This is no small selling point according to the customer, as it offers families a simple, ad-free source of games that can be easily passed on to children. None of the other streaming services listed offer anything comparable except Apple One, a bundle that combines Apple TV+, Apple Arcade and other services starting at $14.99 per month. which is below Netflix’s current “standard” level.
A Brief Look at Netflix’s Price Rising History
Netflix is able to weigh the pros and cons of price increases at any time, given the amount of data it has already accumulated on subscriber abandonment after one of its previous hikes. The first real “hike” to its streaming service came in 2011, when Netflix stopped offering a combination 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 per person. (Physical DVD and Blu-ray rentals are still available to Netflix users in the US, with options for $9.99 per month or $14.99 per month.)
In the years following this decoupling, Netflix offered a combination 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” emerging as a lower loyalty option in 2014 – at the same time as its “Standard” plan increased to $8.99 per month. Ars Technica previously covered Netflix price increases in 2017 and 2019 (but not 2015), and we published a report on Netflix’s subscriber decline in 2021, which could have been due to higher prices in 2020, a change in streaming consumption model as the pandemic temporarily subsided , increased streaming competition or other factors.
