The Price of a Netflix Subscription in 2019 Has Gone Up, and the Timing Couldn't Be Worse for the Streaming Giant
Raising your price when multiple competitors are about to enter the streaming service market makes perfect sense - said no one.
A Netflix price increase is happening in 2019, and we should be surprised because Netflix isn’t in any position to raise its prices given the streaming service market. More on that below, for now, details of the Netflix price increase, between 13-18%, depending on the Netflix plan you currently have. It’s the largest price hike the streaming giant has done since it debuted streaming plans over a decade ago.
How Much Does Netflix Cost Now?
Netflix offers three plans: Basic, HD Standard, and Premium Ultra HD (4K).
- Basic: Was $8, now $9
- HD Standard: Was $11, now $13
- Ultra HD: Was $14, Now $16
For new subscribers, the price hike takes effect immediately. Meaning, if you sign up for Netflix today, you’ll never know what it’s like to pay less for the streaming service. For current subscribers, the hike in price will occur over three months.
Who’s to Blame for the Netflix Price Increase?
I don’t work for Netflix, so I can’t say exactly why they did such a large price increase, especially considering the competition they are soon going to have, but I have a theory.
A-list filmmakers and stars cost money, and Netflix has been signing up more and more to make movies for its platform. If you want to see Will Smith, Sandra Bullock, Ryan Reynolds or Jake Gyllenhaal in a Netflix movie, you have to pay the price. Same goes for Martin Scorsese, Alfonso Cuarón, or Michael Bay behind the camera.
Sandra Bullock makes between $10 – $20 million a film; how much she earned on Bird Box appears to be top secret. But Will Smith was paid an estimated $20 million to star in Netflix’s Bright, and that film is on the list of massive disappointments for the streaming giant.
Big names that draw audiences, like Bullock who 45 million households watched in Bird Box during its first week, are not cheap. Just as movie tickets go up in price, Netflix subscriptions must too to compensate for the cost of a product.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” Netflix said in a statement to the Associated Press.
That’s all well and good but it’s also a stupid move considering the competition Netflix is about to have with soon-to-launch streaming services, and content it’s likely to lose.
Just How Dumb Is Netflix to Raise Its Price in 2019?
Very, very dumb, in my humble opinion.
Apple is launching a streaming service soon, rumored to feature free content to device owners, that will have a library of older content but also original movies and television shows. They’ve signed up Justin Lin of the Fast & Furious franchise to make television shows and just announced that Sofia Coppola and Bill Murray are reuniting to make a movie for A24 that will release via the Apple streaming platform.
Then there’s Disney with Disney+, also arriving in 2019, that is going to feature — you guessed it — Disney, Pixar, and Marvel content. Netflix may lose every Disney-related movie and TV show from its library very soon, and that’s very bad for business.
Bringing up the rear is the WarnerMedia and AT&T streaming service that’s very cable-like but still coming in 2019, and a NBCUniversal ad-supported, free streaming service is on the horizon. And let’s not forget that IMDb Freedive is now online.
With all of this major competition hitting the market and what’s already here, that is not part of the niche streaming services lineup, like Hulu, does Netflix really think it’s a good idea to increase their price? Shareholders do; Netflix shares rose 6.5% upon the announcement, closing at $354.64.
According to its last quarterly report, Netflix has 137 million subscribers worldwide. That’s not enough to support spending more than $12 billion a year — Netflix is in debt. In 2018, Netflix borrowed $2 billion in a bond offering, increasing its debt.
I’m with the group that believes Netflix is on track for its bubble to burst — there’s just too many other options out there for streaming movies and television shows. And I know from personal experience that Netflix’s non-US markets suffer in terms of content availability. Spend a few months in Thailand, where you rarely see any change to what’s streaming on Netflix, and you’ll reconsider your subscription quickly unless you solely love Netflix original content.
Time will tell how Netflix competes in the new streaming services market in the coming months and years. For now, suck it up and pay that extra dollar or two or cancel your subscription – after Velvet Buzzsaw, though, because we all need to see that!