Netflix is once again in the spotlight, this time for contemplating a price increase for its ad-free service. This news comes on the heels of the ongoing Hollywood actors’ strike and is part of a trend of price adjustments by major streaming platforms.
Sources familiar with the matter indicate that Netflix is in discussions to raise prices in several markets globally, with a probable starting point in the United States and Canada. However, the specifics regarding the extent of the price increase and the precise timing of its implementation are not known yet.
Over the past year, ad-free streaming services have seen their costs rise by approximately 25%. This price escalation reflects the efforts of entertainment companies to bring their streaming platforms to profitability while simultaneously enticing price-conscious customers to opt for their more affordable ad-supported plans.
Netflix has signalled its intent to raise prices but plans to wait until the ongoing Hollywood writer and actor strikes conclude. The Writers Guild of America recently reached a tentative agreement with studios, while the Screen Actors Guild, which initiated a strike in July, has started negotiations with Hollywood studios.
Earlier this year, Netflix discontinued its basic $9.99-a-month ad-free tier in the U.S. This decision significantly widened the pricing gap between its $15.49 standard ad-free plan and the $6.99 ad-supported tier launched in November.
Amazon is also entering the ad-supported streaming market, planning to introduce a new pricing tier. In the past year, Netflix has employed various tactics to increase revenue, such as charging households a new monthly fee for sharing an account with non-residents and discouraging freeloaders from using shared accounts.
Most other streaming platforms blindly follow Netflix when it comes to troubling customers. A recent example is Disney’s aggressive crackdown on password-sharing.
Will this move affect the pricing in India? We doubt so. But stay tuned with us to know more about it.