Netflix is one of the main production companies targeted by the ongoing actors’ strike, and that negative attention may be impacting the company’s plans to raise prices. One report suggests that the company is waiting until the spotlight is off its business practices so it can push prices on its cheapest, ad-based offering.
According to a Tuesday report from The Wall Street Journal, Netflix is giving it until the end of the ongoing actor’s strike before bumping up the price of its ad-free subscription. According to unnamed sources with knowledge of discussions, the price increases will start in the U.S. and Canada before moving globally.
Currently, the ads tier costs $6.99 a month and supports two devices at a time for HD viewing. Due to licensing issues, the tier doesn’t have access to all the content ad-less viewers get on Standard and Premium tiers.
Netflix declined to comment on any plans to increase prices in the future. There’s no word of how much the costs will increase, but just based on Netflix’s past increases, it could be anywhere from $1 to $2 a month. The last time the company raised prices was in January of 2022.
That’s not to mention the stealth price increases that are due to Netflix nixing its Basic subscription. Users who haven’t dropped Netflix still maintain the Basic price, but once they leave or try to resubscribe, the only options will be the $6.99 with ads or $10.99 Standard tier.
Netflix introduced Basic with ads (now called Standard with ads) late last year. Though growth took a while to pick up, the tier has since become Netflix’s second-most popular offering for subscribers not willing to fork over the $16.99 a month. Under former CEO Reed Hastings, Netflix routinely emphasized it would not include ads, but after some setbacks early in 2022, the company changed its tune. Now Netflix is trying to find ways to expand its ad business and cut down on repetitive, targeted ads.
Last month, the striking Writers Guild declared a victory over the major networks, including Netflix, with one of the biggest wins being streaming services will have to provide writers with the total number of hours streamed—necessary information for actors and writers to ensure they can collect residuals on projects. In the meantime, SAG-AFTRA is still on the picket lines, and the union is currently in talks with the Alliance of Motion Picture and Television Producers to try and reach some sort of agreement.
The timing for this supposed price increase is also strange considering Netflix’s ad chief Jeremi Gorman announced she was leaving the company. Gorman’s replacement, Amy Reinhard, was formerly Netflix’s VP of studio operations. In a statement, Netflix co-CEO Greg Peters thanked Gorman for “building our ads business from scratch.”
Netflix could effectively make its Standard with ads the new default model going forward. This would put it in line with Max, formerly HBO Max, and its With Ads subscription tier. That will be more than the $US8 Disney+ charges monthly for its ad-supported tier (not available in Australia), but the House of Mouse is also planning to raise prices for its ad-free offerings up to $US14 a month. While Amazon Prime Video tries to push a $US139-a-year Prime subscription, that company plans to make users pay an extra $US3 a month or they’ll start seeing ads as well.
Netflix said it will release its next quarterly earnings report on Oct. 18. We may get a better idea of what the hell Netflix plans to do next later this month, or we may not. In the meantime, don’t expect your cheaper subscription might last too much longer.
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