This time, Netflix is increasing the price of its subscriptions in the United States and Canada
In August 2021, the basic offer, called Essential, increased by 1 euro and went from 7.99 euros to 8.99 euros per month. This measure allowed Netflix align its prices with those practiced in the United States. But if the logic remains the same for the future, there is bad news. The streaming giant has just decided to increase the cost of each subscription level by at least $1 in North America.
It is the second such measure in less than a year that targets overseas streamers. Netflix has already changed its prices in this region in October 2020, when the cost of the standard and premium plans were increased, while the basic package remained the same.
A counter-intuitive strategy
If the price increase may seem counter-intuitive in the midst of the streaming war when competition has never been so strong, it is on the contrary part of Netflix’s long-term strategy to finance its investments in content, satisfy its investors and maintain its leadership.
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The world’s biggest streaming service faces the toughest competition from companies looking to lure viewers into online entertainment. Walt Disney Co, WarnerMedia of AT&T Inc., Amazon.com Inc. and Apple Inc. are among rivals investing billions in new programming.
More resources for more content
« We understand that people have more entertainment choices than ever before and we are committed to providing an even better experience for our members.said a Netflix spokesperson. “We are updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always, we offer a range of plans so members can choose a price that suits their budget.”
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These latest increases had an overall effect on the streamer’s stock price, which rose $2 after the announcement, ending the trading day at $528 per share. In addition, the platform having already conquered the market, it can no longer rely solely on new subscribers to gain profitability. This is why, to keep ahead of the exploding competition, it is increasing its prices and will continue to do so as long as it is possible.
Source : The verge