Netflix’s US prices are going up, a hike that was widely anticipated by analysts and investors but still came a little earlier than expected. New subscribers to a standard plan, Netflix’s most popular one, must pay $1 more, or $14 a month starting Thursday. A premium package — which unlocks perks like 4K resolution, HDR image quality and the ability to stream on four devices at the same time — now costs $2 more at $18 a month.
Netflix didn’t change its basic subscription, which streams at DVD-quality 480p and limits simultaneous streams to just a single device. It remains $9 a month.
Current subscribers won’t see their bills go up immediately, but the respite won’t last long. People who already subscribe to Netflix with a standard or premium package will get email and app notifications 30 days ahead of their price increase, based on their billing cycle. Anyone who didn’t previously subscribe to Netflix and signs up now must pay the higher rates immediately.
The price bump, though likely unwelcome for some Netflix lovers, was expected to come sometime soon. Netflix had already tapped prices higher in Canada earlier this month, a harbinger of US pricing increases to come. Netflix also tends to bump its prices higher roughly every two years. The last time Netflix raised prices in the US was, when the monthly cost of both the standard and premium subscriptions rose by $2 and the basic plan went up $1.
Netflix’s latest rate increases come after a raft of new streaming rivals have launched from media and tech giants in the last year, a period sometimes called the streaming wars. The new competitors — including HBO Max, NBCUniversal’s Peacock and— varying widely in pricing, from free tiers to $15 a month.
But the scale of Netflix’s back catalog and frequency it releases new shows and movies dwarfs that of the new competitors, spurring some analysts to characterize Netflix pricing as too cheap.
“We understand people have more entertainment choices than ever, and we’re committed to delivering an even better experience for our members,” a spokesperson for Netflix said. “We’re updating our prices so that we can continue to offer more variety of TV shows and films — in addition to our great fall lineup. As always we offer a range of plans so that people can pick a price that works best for their budget.”
Netflix has an eye-popping $17 billion content budget. And even with coronavirus disrupting film and TV productions around the world, Netflix expects its slate of programming released this year to to proceed as planned, and the company expects to release even more movies and shows in 2021 than it did in 2020.
The pandemic also ignited Netflix subscriber growth earlier this year, as the virus started locking down swaths of the world and trapping people in their homes with sparse options to entertain themselves. That growth slowed significantly in the last few months, as Netflix predicted, suspecting that people who were going to subscribe sometime later this year simply signed up earlier during lockdowns.
Now, Netflix is betting that people will keep flocking to its service even if it costs a buck or two more.