After raising the prices of its premium tier last year, Netflix is now raising the prices for its basic and standard plans over the coming weeks for existing members and effective immediately for new signups. The basic plan is going up by $1 to $10.99 and the standard plan increasing by $2 to $15.99.
I do find it quite strange that Netflix would increase the prices of its streaming service during a pandemic, and furthermore, at a time when Australia officially entered recession not too long ago where the economy contracted seven per cent.
I get it, Netflix is a business and has undoubtedly seen an increased demand for its services which means an increase on service resources, but I would have would thought would have been a good thing for them. The charts are also painting a great picture for Netflix.
In Q1 2020, Netflix recorded $5.76 billion in revenue. In Q2 2020 it did even better, recording $6.14 billion in revenue. Keep in mind, these are US figures and representative of the whole company, not the Australian division. I realise that Netflix invests a lot in its original content and has produced some great shows (even if they have a tendency to cancel them after two seasons).
A spokesperson had this to say about the price increases
Members tell us how much they value the breadth and variety of the catalogue, and we’re updating our prices so that we can continue to invest in more shows and films.
This pretty much confirms they’re increasing the prices to throw more money at its recently grown subscriber base. Netflix wants to retain its new subscribers before they experience catalogue fatigue and look elsewhere for content once they have watched everything good (we all eventually reach that point).
If Netflix had very little competition, I could maybe forgive the price increases, but Netflix isn’t the only player at the streaming poker table. You have Stan, Amazon Prime Video, Disney+, Apple TV, Binge, BBC Britbox is also launching soon and there have been rumours that Hulu is eyeing off Australia after the success of Disney+.
As a Netflix premium subscriber, I took last years price increase on the chin. We have enough consumers of Netflix in our household that the multiple streams are worth paying for (my wife and I, as well as two kids with different tastes) the fights over what to watch with premium are worth paying for alone.
The timing for a price increase could not be any worse. Despite the widespread unemployment, recession and ongoing pandemic with on/off lockdowns between the states, Netflix is also fighting a war after the PR disaster that is the movie Cuties which has been accused of being paedophilia, resulting in cancel Netflix to trend online.
But, at the end of the day, does it really matter? The increase is at most $2 per month and people spend more on a cup of single coffee here in Australia (unless you’re getting a 711 coffee). Not to mention, you do not need to have Netflix, you’re not locked into a contract and can cancel at anytime.
Whether you realise it or not, never forget that as a consumer, Netflix is at your mercy and you can vote with your wallet if you do not like the price increase or how they handle bad PR. A lot of people these days cancel and resume their Netflix subscriptions on a regular basis as content comes and goes (new Stranger Things season and so forth).
If money is a little tight, I highly recommend Amazon Prime Video, which is one of the cheapest streaming services in Australia at around $6 per month and has some serious great original content.