Netflix is raising its subscription rates once again.
The popular video streaming service has confirmed to the media it plans to roll out new price hikes across all its subscription plans in the US, according to the AP. This marks the fourth time Netflix has changed its pricing strategy in the US. The last price hike happened in 2017.
We suspect Netflix will reveal more about this decision on 17 January, when it reports quarterly earnings.
Right now, most Americans will probably eat the price hikes without hardly complaining. But that might change, especially as Netflix will soon lose some of its biggest content while having more competition than ever. Here's what you need to know, including when and why this is happening.
We've also contacted Netflix for a comment and will update as we know more.
How much is Netflix?
Standard definition plan
Netflix's SD plan is $8 a month, as of January 2019. It is raising to $9 monthly, due to the new price hike.
High definition plan
Netflix's HD plan, which is the most popular plan, is $11 a month, as of January 2019. It is increasing to $13 monthly.
Ultra high definition plan
Netflix's 4K plan is $14 a month, as of January 2019. It'll go up to $16 monthly.
When will the price hikes go into effect?
Existing subscribers in the US will have their prices raised gradually over the next three months, so from mid-January 2019 to mid-April 2019. However, new subscribers in the US will immediately begin seeing (and paying) the new prices.
Why is Netflix raising rates?
Netflix’s primary goal has been - for quite a long time - to produce more of its own original content. For instance, Netflix CEO Reed Hastings once said Netflix has a goal to increase the amount of original content on the platform from 20 per cent to 50 per cent. So, if we had to guess, that is a large part of what’s driving these new price changes, as the video streaming service has to finance its original productions, which isn't cheap.
Let's also not forget that Netflix can’t as easily acquire the rights to stream content from other media companies. It’s expected to lose some of its major content providers later this year, when all the available Disney and Pixar and some Marvel content will abruptly move over to Disney’s upcoming streaming service, Disney+. On top of that blow, it seems like almost every company has or is building a new streaming platform.
CBS and FX have already launched CBS All Access and FX+, for instance, and NBCUniversal recently announced it'll be debut a streaming platform in 2020. Meanwhile, Apple has been producing its own content, with the expectation it'll eventually launch a streaming platform in the near future.
Is Netflix raising rates in the UK?
Netflix has only announced price hikes for US users. And it's confirmed they will have no impact on UK users.