Netflix will wait until Hollywood strikes end to hike streaming prices
After a prolonged strike by Hollywood actors, Netflix is considering raising the price for its ad-free streaming service, falling in line with recent price changes among the top streaming platforms across the country.
Credit: David Balev/Unsplash
Ad-free streaming services have become 25% more expensive in the last year, as the entertainment industry aims to boost profitability and attract budget-conscious customers to their ad-supported subscription plans.
According to The Wall Street Journal Netflix plans to postpone the impending price hike until the conclusion of both the Hollywood writer and actor strikes. The Writers Guild of America recently announced a tentative agreement with studios, and the Screen Actors Guild, which initiated a strike in July, has resumed negotiations with Hollywood studios this week.
According to people familiar with the matter, there are talks about potential price increases happening in different countries around the world. However, it seems like the first changes might happen in the USA and Canada.
There is no specific information yet about how much prices will go up or when exactly these changes will happen.
Netflix recently discontinued its basic $9.99 per month plan without ads in the United States in July. Subscribers currently pay $15.49 for standard plan without ads and $6.99 for an add supported tier, which was launched in November 2022.
Other streaming platforms are also experimenting with new pricing structures that focus on offering exclusive content, such as live sports, without jeopardizing their existing subscriber base.
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Comments
This is what I wrote when they hiked prices just a couple of months ago:
It appears I was correct, and sadly, based on the headline of this article, the sleight of hand has already worked.
Oh yeah? Then how come Netflix has been profitable for at least 13 years, more so every year? Oops
https://www.macrotrends.net/stocks/charts/NFLX/netflix/gross-profit
Why you carrying their water, bro?
It is only greed that demands ever-increasing profit margins year over year. Why are they entitled to that? Corporate greed for more is what drives inflation (not labor costs).
Me, what I’ve noticed when I look at legacy hit shows like Star Trek: TNG and compare it to streaming shows like Star Trek: SNW, is that the legacy seasons had two and a half times more episodes (26) while focusing on good writing and character development, while the new seasons have 10 episodes that focus on very expensive, cinematic set pieces and effects. That is a choice. Writing has been devalued, which we see again by the studios’ resistance to paying them.
Gross profit is the revenue from selling a product minus the cost of producing the product. It does not take into account the cost of operating the business. Which includes taxes, labor cost, rent, electricity, water, insurance, maintenance, accounting cost, advertising, improvements, etc.. If these cost total more than the gross profit, then company is operating at a loss, regardless of their gross profit.
Try this ....
https://www.macrotrends.net/stocks/charts/NFLX/netflix/net-profit-margin
Clearly one can see that Netflix net profit did not increase every year. Now revenue has increased every year but increase revenue doesn't always lead to increase profit if cost increased more than revenue.
Plus Netflix net profit margin is not that outrages.
Here's Apple Inc. charts ....
https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-margins
Currently, Apple net margin of 25% is nearly twice that of Netflix at 13%, so is Apple twice as greedy as Netflix?
As for Apple’s greater net profit margin — no, it just means they have a better business selling hardware. They haven’t had to raise prices every year and people generally don’t feel they’ve been abused by the price nor the value proposition. “Take my money!” is an Apple meme for a reason.
But keep carrying that water. We deserve higher prices! <self-flog back> Thank you, sir! May I have another, sir!
And Netflix net margin did not rise straight from 7% to 13%. It rose from 7% to 18% in about 11 years but had about 5 years where net margin was below 5% and then declined from 18% to 13% in just the past 2 years. This is reflected in NFLX share price.
On the 4th quarter of 2021, NFLX peaked at about $690, today after a recent price increase and doing away with lower-priced service tier, NFLX is at $376 and went as low as $200. NLFX is down 55% since the middle of 2021, when their net margin peaked. More competition and slowing growth rate of new customers subscribing to a streaming service are hurting Netflix and nearly all streaming services now. Since after the pandemic in 2020, inflation has hurt nearly all streaming services as consumers find ways to cut spending to afford the things they need. Nearly all streaming services has raised their prices since 2020. Even Apple+ and Apple Music.
https://www.ign.com/articles/apple-tv-price-increase
I couldn't care less if you think Netflix is being a greedy corporation for raising prices just for more profit sake, but at least back up that claim with real profits numbers that reflects that greed.
And heres list of some of the other "greedy" streaming services are are planning to raise rates or already had since 2021.
https://www.forbes.com/sites/brianbushard/2023/08/09/disney-hulu-raise-rates-here-are-the-other-streaming-services-hiking-prices/?sh=69826dfd28ea
https://www.axios.com/2023/07/25/streaming-prices-2023-comparison-raise
In the end @foregoneconclusion might be more right that wrong, when he commented .... "Once again, the reason prices are always being raised is because streaming isn’t a workable business model."
https://www.cnbc.com/2023/09/17/hollywood-streaming-profits-struggles.html
In Spring of that year, a market that had been the red-headed stepchild of cinemas for movies and broadcast/cable for serialized shows became a primary lifeline. Disney+ had just launched in November of 2019. Suddenly, cinemas went dark, leaving TV screens as the only game in town for movies already preparing for release, just as all TV and film productions shut down, with the prospects for re-starting them safely getting much more expensive. This only pushed more competitors toward streaming, both through seeking deals with existing platforms for content, and hastening major studio plans to create their own new platforms.
Now, as the pandemic recedes, we have a scramble of corporate bean-counters realizing that structures built on pandemic conditions no longer make sense. Others are just bone-crushingly dumb, the result of egos and MBA schools that train everyone to think of everything as qualitatively equivalent widgets (think drowning a household brand like HBO in a re-branded "Max" app). Still others are somewhere in-between, like Netflix, which seems determined to test the bounds of customer tolerance for abuse, with price hikes on top of increasingly obtuse subscriber packages intentionally designed to force customers into higher-priced tiers. (Isn't it deliciously ironic how the main argument for switching from cable TV to streaming services used to be the opportunity to just pay for what you want a la carte?)
So now, with studios increasingly pulling the more valuable back-catalog content into their own branded apps, each one will increasingly look to creating exclusive new content to drive subscription retention, and oh, dammit, now the writers and actors are suddenly circumventing corporate plans to cut costs for creating that content by getting more of them to work for peanuts or for free. (I mean, AI is a corporate exec's wet dream: scrape writers' past work to "generate" entirely derivative new content (the very lifeblood of Hollywood execs!) for free, while using body scans of no-name actors paid for a single day at scale to cover all the future parts not filled by stars whose box-office draw will more than pay for their independently-negotiated deals.)
So with all that leading up to now, watch as streamers' price hikes are blamed exclusively on those nasty, corrupt, greedy unions, taking your hard-earned money just to have something to watch after a long, hard day at work.