On Friday, Jan. 14, Netflix announced an immediate $1-2 price hike on its United States subscription rates. The streaming company simultaneously announced a similar increase in Canadian subscription rates. Read More »
What Will Netflix’s New 2022 Rates Be?
There are three tiers to Netflix’s U.S. subscription plans. With the recent uptick in rates, subscribers can now expect to pay:
- $9.99 instead of $8.99 for Netflix basic
- $15.49 as opposed to $13.99 for a standard plan
- $19.99 compared to $17.99 for a premium plan
The basic plan allows subscribers to stream a single movie at once, whereas the standard and premium ones have two and four-at-a-time capacities, respectively.
Canadian basic plan rates remain at C$9.99 per month. Premium plan rates increased by C$2 and are now C$20.99 monthly.
Does the 2022 Netflix Price Increase Affect All Customers?
Yes. The updated subscription rates went into effect right way for new subscribers. Netflix plans to send emails to existing subscribers giving them 30 days’ notice of the price increase going into effect on their accounts. Nextflix’s spokesperson indicates that they intentionally have a multi-tiered pricing structure to ensure that subscription options fit every customer’s budget.
Is This the First Netflix Price Increase Ever?
No. This latest 2022 Netflix price hike marks the fifth time in the past seven years that the streaming company has raised their subscription rates in recent years. They initially did so in 2015, then again in 2017. There was a $2 increase in monthly subscription rates in 2019 and a $1 price hike near the end of 2020 before this early 2022 pricing uptick announcement.
What Explanation Did Netflix Give For Increasing Their Rates?
Netflix’s spokesperson noted that the pricing increase would allow them to continue offering quality entertainment options to their subscribers and grow their offerings. Just for context, this price hike comes during an era in which several big-name companies, such as Apple, AT&T, Disney, Amazon and WarnerMedia, have been investing increased capital into expanding their programming options.
How Does Netflix’s Subscription Rates Compare to its Competitors’?
Netflix’s latest subscription rate increase means that now its standard monthly subscription is higher than other platforms’. The Walt Disney Company offers $7.99 monthly subscriptions or an even-lower fee when subscribers pay $79.99 annually. The AT&T-owned HBO Max, for example, has a 12-month promotion that allows new subscribers to pay only $11.99 monthly for access to its streaming service.
What Has Been the Public’s Response to Netflix Raising its Rates?
Netflix’s share prices had declined as much as 11% over the past year leading up to the price increase announcement. Many analysts suggested that the decline in share prices was attributable to an increasing trend for investors to divest themselves of tech company stocks.
Netflix had recently turned a new leaf in terms of profitability, though. Netflix reported generating more than $3.3 billion in revenue off its 74 million U.S. or Canadian subscribers during the third quarter of 2021.
Their international subscriber base is also quickly growing. Netflix’s latest data suggests that they have 213.6 million worldwide subscribers. The South Korean phenomenon “Squid Game” has been instrumental to Netflix’s significant growth since Sept.
Netflix stock had increased in value by 1.3% to $525.69 per share by the time the New York stock exchange wrapped up the week on Jan. 14 — the same day it announced its price increase.
What Impact Might Netflix’s Price Increases Have on its Future?
Many subscribers have expressed concern over what now seems like annual increases. Still, Netflix has persisted in emphasizing that the price hikes are necessary to continue offering the high-quality services and programming their customers have come to rely on.
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