On Friday, Netflix confirmed plans to raise the prices of its streaming video services in North America for the seventh time in 11 years.
Unlike many previous Netflix price hikes, this year’s hike affects all three subscription options. In the U.S, the “basic” tier, which is capped at 720p and includes other limits, gets its first increase in three years, jumping $1 to $9.99 per month. The “standard” tier of 1080p goes up from $1.50 to $15.49 per month. And the 4K “premium” tier jumps $2 to $19.99 per month. Canadian customers can also expect similar price increases across all three tiers.
Netflix says the price increases will be phased in for existing customers based on their billing cycles, with all customers receiving no less than 30 days’ notice before the higher prices take effect. New customers should start paying the higher prices right away.
Paying more for “an even better experience”
In a statement delivered to various media, a Netflix representative offered a curious explanation about the price increase. “We understand that people have more entertainment options than ever before and we are committed to providing an even better experience for our members,” the statement said. “We’re updating our pricing so we can continue to offer a wide variety of quality entertainment options. As always, we offer a variety of plans so members can choose a price that fits their budget.” (Ars Technica asked Netflix representatives questions about the announcement, but did not receive an immediate response.)
That explanation reminds customers of the growing selection of affordable streaming options available in North America. At press time, the following popular streaming services cost less per month than Netflix’s $15.49 per month 1080p “standard” tier: Amazon Prime Video, Apple TV Plus, Disney Plus, HBO Max, Hulu, Paramount Plus and Peacock. Almost all include 4K display options by default at no extra charge (Peacock remains the 4K exception on that list).
In terms of exclusive content, Netflix has been bullish on both producing its own movies and series and signing major deals with producers of popular content. In its biggest license deal of 2021, Netflix secured exclusive streaming rights to your field for five years at a reported cost of more than $790 million. This comes like other streamers they open their pocket books to lock your own exclusives licensed film and television libraries.
The company’s Friday statement leaves out Netflix’s other unique selling point: a growing library of exclusive games for iOS and Android devices. Until now, Netflix has simply dabbled in this market by releasing a selection of simple, family-friendly smartphone games that are free of microtransactions and ads. That’s not a small selling point depending on the customer, as it gives families a simple, ad-free source of games that can easily be handed over to kids. None of the other streaming services listed offer anything comparable, with the exception of Apple One, a bundle that combines Apple TV+, Apple Arcade, and other services starting at $14.99 per month, which is less than Netflix’s current “standard” level. .
A Brief Look at Netflix’s Price Hike History
Netflix is in a position to weigh the pros and cons of price increases at any time, given how much data it has already amassed on subscriber declines after any of its previous hikes. The first true “uplift” to its streaming service came in 2011, when Netflix stopped offering a bundle of physical DVD rentals and streaming access to US subscribers for $9.99. Instead, customers were told at the time that they could access each service separately for $7.99 each. (Physical DVD and Blu-ray rentals are still available to Netflix users in the US, with options of $9.99 per month or $14.99 per month.)
In the years since that split, Netflix has delivered a mix of new tiers and price increases to those tiers, with its “premium” plan launching in 2013 at $11.99 per month and their “basic” plan emerged as a lower loyalty option in 2014, around the same time their “standard” plan rose to $8.99 per month. Ars Technica previously covered Netflix price increases in 2017 other 2019 (but not 2015.), and we published a report on Drop in Netflix subscribers in 2021, which could be due to a price increase in 2020, a change in streaming consumption pattern as the pandemic temporarily subsided, increased streaming competition, or other factors.