Why Netflix keeps cranking up its prices




Every year, the cost of streaming gets more and more expensive — and just last week, prices started going up again. Netflix announced that all of its tiers would get an immediate price hike for new subscribers, boosting its most expensive plan to $20 per month. It’s the third price increase since 2019.

At $15.50 per month, Netflix’s standard tier now slightly out-prices HBO Max ($15 per month) and the Disney Bundle (which includes ESPN Plus and Hulu for $14 per month), making it one of the most expensive on-demand streaming options among leading services. If you want 4K, it gets even pricier. That’s not an insignificant amount of money, considering people tend to have around four paid streaming subscriptions, according to recent data from Deloitte.

While the price hikes sting for consumers, it’s safe to expect they’ll continue — especially for Netflix. Growth opportunities have stalled, and the company’s spending on content continues to grow. To keep up, Netflix has to either increase the number of subscribers paying for its service or ask its existing customers for more money. And right now, Netflix knows it can.

“They’re doing pretty well, but they’re going to continue to tighten up their finances as time goes by,” Parks Associates director of research Paul Erickson tells The Verge. “This is the fundamental way in which they do that — small incremental price changes over time. Because they feel they are so well entrenched, and their customers are loyal, they feel that it’s not going to materially affect their subscribership.”

One of the big reasons Netflix needs money is to pay for new shows and movies. Streaming services are spending a frankly outrageous chunk of change on original programming, with global spend expected to exceed $230 billion in 2022, according to estimates from firm Ampere Analysis. Ampere positions Netflix as the third-largest investor in video content, surpassed only by Disney and Comcast — both of which the firm notes invest in pricey sports rights.

By dumping truckloads of money in original programming, streamers hope to not only hang onto their existing customers but lure in new subscribers as well. For Netflix, expanding its programming across genres and categories helps it be everything to everyone.

But there’s another reason Netflix has turned to price increases to raise more money. Even with its hundreds of millions of active subscribers, Netflix’s subscriber growth has begun plateauing. The company continues to add subscribers, but the number of quarterly additions has dipped in recent years (in some cases, even falling below forecasted figures). Netflix’s content spend, meanwhile, only continues to grow, with the company spending billions on programming every year.

https://www.theverge.com/2022/1/20/22893419...ANOJ-9XBbhaVWZM

This post has been edited by xpole: Jan 22 2022, 11:25 AM

Too much streaming services nowadays.

Not many people can afford to subcribe to 2-3 services. End up they will choose one that they always watch.

Or the quality of the content is getting sucks nowadays so they decided to unsubscribe

This post has been edited by xpole: Jan 22 2022, 11:26 AM

Disney content in Malaysia is really sucks compared to US.