PRICE HIKE: Netflix Raises Subscription Fees on These Customers

Bad news, cord cutters: Netflix is now more expensive for many subscribers.

The popular video streaming service announced that it has raised the price on two ad-free subscription tiers. These price changes, which were predicted to be coming, go into effect immediately.

Let’s take a look at what we know.

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Netflix Raises Subscription Price for 2 Ad-Free Tiers

Netflix raised the price on two of its ad-free subscriptions effective October 18, 2023.

The “Premium” subscription tier, which is Netflix’s top-of-the-line option, saw a price increase of $3 per month. That means users who were paying $19.99 per month will now pay $22.99.

Netflix also raised the price of its “Basic” subscription, which it stopped offering to new customers in July 2023. That ad-free subscription went from $9.99 to $11.99 per month for the customers who are still signed up for that option.

The “Standard with ads” and “Standard” subscriptions remain the same price and were unaffected by this price hike.

Here’s a look at Netflix’s new pricing model:

Subscription Tier	Old Price	New Price
Standard with ads	$6.99	$6.99
Basic (not available to new subscribers)	$9.99	$11.99
Standard	$15.49	$15.49
Premium	$19.99	$22.99

You can read more about what the tiers have to offer here:

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What Netflix Is Saying About the Price Increase

Netflix unveiled the price increase as a part of its 2023 Third Quarter Shareholder Letter.

Here’s what was said about the increase:

“While we mostly paused price increases as we rolled out paid sharing, our overall approach remains the same — a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more. Starting today, we’re adjusting prices in the US, UK and France. In the US, our ads ($6.99) and our Standard plans ($15.49) will stay the same, while Basic will now be $11.99 and Premium $22.99. For the UK and France, our pricing for Ads/Basic/Standard/Premium are UK £4.99/£7.99/£10.99/£17.99 and 5.99€/10.99€/ 13.49€/19.99€, respectively (like the US, our Ads and Standard plans in UK and France are unchanged). Our starting price is extremely competitive with other streamers and at $6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket.”

Previously, Netflix CFO Spencer Neumann had indicated that the streaming service did not plan to increase prices on customers after rolling out an extensive plan for charging customers for account sharing earlier in 2023.

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Why Netflix Is Raising Prices on Ad-Free Content

You’re probably wondering why Premium subscribers are being asked to pay more for their already expensive subscriptions while the ad-supported customers get to keep the cheaper pricing at $6.99 per month.

The answer to that question also can be found in the more recent shareholder letter:

“Our immediate priority is building our ad membership so that Netflix becomes an essential buy for advertisers, which is key for advertising to become material to our business. In Q3’23, our ads membership increased nearly 70% quarter-over-quarter and now accounts for ~30% of all new sign-ups in our 12 ads countries.”

Netflix needs to continue to show growth in the ad-supported tier to entice advertisers to spend more money there.

So it stands to reason that it wants to pressure its existing customers to make a value choice on how much they’re willing to pay to skip the commercials. Squeezing out the Basic tier was the start of that. Now, you must make at least a $9 per month investment to skip on ads. And Premium subscribers are being asked to pay $16 more per month for the ad-free experience.

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Are you impacted by this latest round of price increases? Will this cause you to cancel or change your subscription tier? We’d love to hear your thoughts in the Clark.com community.