Because Netflix will increase the cost of the subscription
The video streaming company is raising the prices of its subscription plans in the United States and Canada. Competition with rival services Disney Plus and HBO Max pushes Netflix to spend a lot on content to keep up
For Squid Game and Bridgerton, users have to pay more: the Netflix subscription becomes more salty.
Red Hastings' video streaming platform has raised its monthly subscription price from $ 1 to $ 2 per month in the US depending on the plan. The company said Friday. With this revenue, the company will continue to invest in new programming to compete in the crowded video streaming market.
Netflix said last fall that it has over 213 million subscribers worldwide, far more than its new rivals' subscription count. But Walt Disney, WarnerMedia, Amazon.com and Apple are also pouring billions into new programming.
In a world of entertainment dominated by home viewing, Netflix hopes its prestige justifies a new monthly price of $ 15.49, Quartz comments. Especially since its standard plan is now more expensive than HBO Max.
But the price increase also reflects Netflix's need to squeeze more revenue from North America, where subscriber growth is becoming weaker.
Shares of Netflix were up about 2% following the news, first reported by Reuters . Wall Street was counting on the platform's decision to raise prices as customer growth declines.
The hike in subscription prices in the US and Canasa comes a week before the streaming company announces its fourth-quarter earnings.
All the details.
HOW MUCH AMERICANS AND CANADIANS WILL SPEND ON THE NETFLIX SUBSCRIPTION
In the United States, the subscription price for the standard plan has increased by $ 1.50 to $ 15.49. The basic plan increased by $ 1 to $ 9.99 and the premium plan increased by $ 2 to $ 19.99.
In Canada, the price of the standard plan also rose by 1.50 to 16.49 Canadian dollars. The premium plan has risen to CAD $ 20.99. Its basic plan, however, remained unchanged.
THE MOTIVATION OF THE COMPANY
Motivating its decision, Netflix provided a statement identical to its October 2020 comment, the last time it raised its prices.
“We understand that people have more entertainment choices than ever and we are committed to providing an even better experience for our members,” said a spokesperson for Netflix. “We are updating our pricing so that we can continue to offer a wide variety of quality entertainment options. As always we offer a range of plans so members can choose a price that fits their budget. "
INCREASE ONE WAY SUBSCRIPTION?
Users will therefore pay more for their subscriptions so that Netflix can continue to invest in its productions.
As CNN points out, the company has spent billions of dollars on content, and as streaming becomes more integral to the entertainment landscape, the growth of companies like Netflix tends to slow down and attract new subscribers. The company said it has 74 million members in the United States and Canada, but that growth in those regions has become saturated. At that point, the revenue has to come from somewhere. Raising consumer prices is an easy way to get there.
THE COMMENT OF THE ANALYSTS
While the market welcomed Netflix's decision, analysts also support the decision.
Netflix has added customers despite previous price hikes, which shows its members have been willing to accept higher costs, Evercore ISI analyst Mark Mahaney told Reuters .
"This is proof that Netflix has pricing power," said Mahaney.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/perche-netflix-aumentera-il-costo-dellabbonamento/ on Thu, 20 Jan 2022 07:45:40 +0000.