Netflix is Now More Expensive Than Ever

Published on October 30, 2020

Netflix has increased its monthly subscription cost by $2. A monthly standard subscription now costs $14. The high-end premium subscription, on the other hand, is now $18. As for the basic plan, the price remains the same at $8. It’s one of the several price increases the streaming giant has issued over the years, as they spend more and more money on original content. The price increase will take effect over the next two months.

With the additional cost, analysts estimate Netflix will boost sales by $500 million to $1 billion next year. Almost two years ago was the last time the streaming service hiked up its prices. Netflix’s stock also went up by 5% following the announcement. “We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members,” a Netflix spokesperson said. “We’re updating our prices so that we can continue to offer more variety of TV shows and films.”

Netflix is now the priciest of the most high-profile streaming services. Disney+, for example, only costs $7. Plus, Disney fans can add ESPN+ and Hulu for only $13 in total. As for the fresh and new Apple TV+, their subscription plan only costs $5. Netflix’s content chief Ted Sarandos has argued in the past the price rises won’t hurt the company since, in his belief, the platform offers consumers the best and most wide-ranging original content. 

The price hike was talked about last week during an earnings call. “The core model we have, and what we think really our responsibility and our job is, is to take the money that our members give us every month and invest that as judiciously and as smartly as we can,” Greg Peters, Netflix’s chief operating officer, said. “If we do that well… and make that efficiency and effectiveness better, we will deliver more value to our members, and we will occasionally go back and ask those members to pay a little bit more to keep that virtuous cycle of investment and value creation going.

New on Netflix
Photo by Mollie Sivaram on Unsplash

More people were streaming video content than ever earlier this year. Netflix had to reduce the streaming quality in Europe, as an example, to avoid crashing the Internet. It wasn’t likely, but it was possible. “We estimate that this will reduce Netflix traffic on European networks by around 25% while also ensuring a good quality service for our members,” a Netflix rep said at the time. This year, Netflix saw a 70% increase in stock value. In the first quarter of 2020 alone, 16 million new subscribers signed up. Back in April, the streaming had 183 million worldwide customers. 

With the potential $500 million to $1 billion next year, Netflix will continue to pour money into original features and television shows. In 2020, the company spent a record $17.3 billion on new content. In 2019, Netflix spent $15.3 billion. The spending will only to go up. By 2028, the streaming service will spend upwards of $26 billion a year. It’s why Ted Sarandos has said there’s no price decrease in mind for the future. 

As much money as Netflix spends, earlier this year it was reported the company was now $14.17 billion in debt. The debt only rises. The game plan is to continue to use debt to finance future plans, including their most expensive movie to date from the Russo Brothers.

Netflix still has plenty of original content coming up before the year comes to an end, including David Fincher’s highly-anticipated and fabulous-looking, Mank. The movie is about the writer of Citizen Kane, and it’s already another serious Oscar contender for the streaming giant. Most recently, the streaming service released the latest Adam Sandler movie, Hubie Halloween, and announced plans for another Sandler film.

Jack Giroux is a Staff Writer at Grit Daily. Based in Los Angeles, he is an entertainment journalist who's previously written for Thrillist, Slash Film, Film School Rejects, and The Film Stage.

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