Netflix, the streaming media company announced on Friday that it was raising prices in the U.S. Canada. Subscription charges for the normal plan in the United States increased from $1.50 to $15.49. The basic plan on the other hand rose from $1 to $9.99 while the premium plan shot up from $2 to $19.99.
In Canada, the normal subscription plan also rose from $1.50 to $16.49. The premium subscription plan increased from $2 to $20.99. Netflix’s basic plan in Canada remained unchanged. The company, through a statement to CNN, offered a similar explanation for the price changes similar to the one issued in October 2020 – the last time it increased its prices.
“We perfectly understand that there are many entertainment options out there. However, we are committed to ensuring that our clients get the best”, said a Netflix spokesperson. “We have decided to adjust our prices upwards to be able to offer our clients quality entertainment options. As we have always done, we offer a wide range of plans so that our members can select what is suitable for them”, he added.
Following the news, the stock price of Netflix jumped by approximately 2 percent.
The increase in prices comes just a week before the company announces its earnings for quarter four. Many people have high anticipations with regard to the financial position of the company.
But the reason why Netflix has increased its prices is an open secret: The company has in the recent past spent a lot of money on content creation. Considering the fact that streaming is becoming essential to the entertainment landscape, the expansion of companies like Netflix appears to slow down because of the difficulty of attracting new subscribers.
In October 2020, Netflix reported that it increased the number of its subscribers by 4.4 million, raising the total number of its global subscribers to 213.5 million. While this was a significant move, the following two quarters were very sluggish for the streaming company.
During the same year, Netflix reported that it had increased the number of its subscribers in the U.S. and Canada by 70,000. Nonetheless, that was an improvement from a loss experienced in the second quarter. While the company claims that it has a large number of subscribers in those countries, the truth is that the market in those two countries is already saturated.
The increase in prices is definitely going to have s significant effect among subscribers in the affected countries.
Dil Bole Oberoi
