Netflix Raises North American Monthly Subscription Fees

Netflix quietly raised its North American (including Canada) subscription fees $1-$2, depending on the plan, effective immediately for new subscribers, and rolled in over the coming weeks for existing subs. It was the streamer’s first price hike in the region since October 2020.

The standard U.S. subscription now costs $15.49 per month, up from $13.99, affording users two simultaneous streams. The basic plan increased $1 to $9.99 for one user. The premium plan, which enables four concurrent streams, now costs $19.99 monthly. In Canada, the standard plan went from C$16.49 to C$14.99.

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“We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options,” a Netflix said in a statement. “As always, we offer a range of plans so members can pick a price that works for their budget. We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members.”

Wall Street approved the move, sending Netflix shares up more than 3.5% in late trading Jan. 14. The streamer reports fourth-quarter financial results Jan. 20, with an estimated 8.4 million net gain in subscribers to 221 million worldwide.

Netflix Raising U.S. Subscription Prices, Except Basic Plan

Netflix Oct. 29 has quietly begun implementing price hikes across two of its three subscription plans. The standard plan increases $1 to $14 per month, while the premium plan increases $2 to $18 monthly. The $9 basic plan remains the same. The hikes affect all new subscribers immediately, while existing subs will be phased in over the coming weeks before their billing cycle. Netflix last raised U.S. prices in January 2019.

The SVOD pioneer, which dabbles in pricing at different times in global markets, signaled a price hike during its most recent fiscal call when Greg Peters, chief product officer, said that with Netflix increasing original content production, subscribers could expect to see a price hike to pay for it.

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“You heard from Ted [Sarandos] the number of original productions we’re doing, increasing even under these [pandemic] conditions … if we do that, we feel like there is that opportunity to occasionally go back and ask for members where we’ve delivered that extra value to pay a little more,” Peters said on Oct. 20.

A Netflix spokesperson said the U.S. price hike does not suggest a similar global price hike. Netflix ended Q3 with 195 million subscribers. The news sent shares down slightly in after-market trading.

Netflix Canada Raising Subscription Prices

Netflix is raising the price of select monthly subscriptions in Canada, effective immediately for new members — and within 30 days for existing subs. Netflix has less than 7 million subscribers in Canada, according to Statista.

The standard plan affording subs access to two screens simultaneously in HD now costs $14.99 (Canadian) from $13.99; the premium plan (four-screen use in 4K UHD) costs two dollars more at $18.99. The basic plan, which enables subs to watch one screen at a time with lower quality resolution, remains unchanged at $9.99.

“Canadians have never had more choices when it comes to entertainment and we’re more committed than ever to delivering an experience that exceeds their expectations,” Netflix said in a statement. “As always, we will continue to offer a range of plans so that people can pick a price that works for their budget.”

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Netflix, which launched its first international operations in Canada in 2010 priced at $7.99 monthly, last raised prices north of the border in 2018. The SVOD behemoth said the price increase would help sustain operations and improve content offerings.

Analysts have long suggested Netflix should increase prices in the near-term due to escalating content spending, the service’s market leader status and a two-year gap since the last price hike.

Rich Greenfield with Lightshed Partners contends Netflix is 85% more expensive than Disney+ ($12.99 vs. $6.99), yet Netflix consumption is five times larger. Even when adjusting for Netflix having twice the number of subscribers as Disney+, user time spent on the platform is 160% more than Disney+.

“We continue to expect to see Netflix move pricing higher by early 2021, particularly as its content advantage increases versus its peers,” Greenfield wrote in a post. “The fact that Netflix is larger than two competing apps that are free, illustrates just how important the service has become to consumers.”

Report: Most Netflix Subs Unlikely to Cancel Service Following Price Hike

Another day, another prognostication how Netflix’s price hikes will affect subscribers.

New data from Hub Entertainment Research finds most subs will not stop service as Netflix ups plan pricing from $1 to $2. The Portsmouth, N.H.-based research firm said any impact on subscribers would likely occur among those paying $15.99 monthly for the premium plan enabling access to Ultra HD content and up to four screens concurrently.

Indeed, 69% of survey respondents said they would keep their current plan, while 16% said they would drop to a lower-priced plan. Just 9% said they would drop the service, while 6% said they would switch to a more expensive plan.

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Netflix, which no longer discloses subscriber churn, added 29 million subscribers in 2018 to end the year with 137 million.

Among basic subs, 76% said they would keep the plan, with 12% considering upgrading to more-expensive plan. Just 8% of standard and 10% of premium plan subs said they would drop Netflix.

Hub said 24% of standard subs indicated a desire to downgrade to the $8.99 basic plan, while 27% of premium subs said they plan to downgrade.

While 70% of subscribers have heard about the price hike, about 50% said they were unhappy about it.

Survey respondents ranged from 8% who said they were “angry,” 38% who said they were “annoyed,” 39% who were “accepting,” and 15% who were “positive.”

“This research shows that Reed Hastings is right when he says that consumers choose based on value, not just price,” Jon Giegengack, principal at Hub, said in a statement. “Despite the increase, the great majority of customers say they’ll keep their subscription. However, the fact that half are unhappy shows that Netflix can’t raise prices indefinitely, and that higher fees make delivering on the promise of high-quality exclusive content more important than ever.”

Among standard (51%) and premium (44%) subs, they were more likely to be “annoyed” or “angry” about the price hike than basic (37%) subs.

“In some respects, the timing of the price hike announcement couldn’t have been better for Netflix, coming on the heels of its enormous viewership success with Bird Box, the buzz about Bandersnatch,and its strong subscriber growth in Q4,” said Peter Fondulas, co-author of the study. “But in an increasingly competitive SVOD marketplace, even a $1 to $2 price increase can lead subscribers to start considering alternatives.”

MoviePass Eyes Surge Pricing as May Cash Burn Hit $40 Million

Fiscally-challenged MoviePass reportedly plans to introduce new pricing this summer targeting movies with high consumer demand.

In an interview with Business Insider, CEO Mitch Lowe said the concept includes implementing a surcharge (from $2) for blockbuster releases and other movies on opening weekend. The idea is to negate the full ticket price impact MoviePass pays exhibitors for every screening frequented by subscribers.

In its most-recent fiscal filing, parent Helios and Matheson Analytics said MoviePass was burning through an unsustainable $21.5 million monthly in the first quarter reimbursing theaters. That funding ballooned to $40 million in May.

Meanwhile, MoviePass will also enable subscribers to bring a friend and purchase tickets for Imax and Real 3D screenings.

In a statement to Gizmodo.com, MoviePass said it is keeping the $9.95 monthly pricing plan enabling subs access to one daily screening, while launching “new, on-demand options” that include ordering “tickets specifically for certain high-demand showings for a small additional fee.”

The updated pricing comes as HMNY sold 20,000 shares of preferred stock for $164 million