×
You will be redirected back to your article in seconds

Netflix Prices for Many U.S. Customers Will Increase in May 2019

Netflix is about to get pricier for many users: The streamer this week is notifying more U.S. customers that its previously announced fee hikes will take effect starting with May 2019 billing cycles.

The company in January announced higher pricing for all plans — representing its biggest price increase to date. The new rates applied to new subscribers immediately, and since then Netflix has been gradually moving existing customers to the higher-priced tiers, based on each member’s billing cycle.

Under the new pricing, Netflix’s Standard plan (with two HD streams) increases by $2 per month, from $10.99 to $12.99. The Premium plan, which provides up to four Ultra HD streams, is increasing from $13.99 to $15.99 per month and the Basic plan (one non-HD stream) is going up for the first time, from $7.99 to $8.99 per month.

The company has told customers that it’s raising prices to “continue investing in great entertainment and improving the overall Netflix experience.”

Will the price hikes hurt Netflix? Wall Street isn’t expecting a mass exodus of subscribers, although there will inevitably be a certain number of customers who will cancel their Netflix accounts. It’s worth noting that when Netflix last raised rates in the fourth quarter of 2017, that resulted in minimal cancellations and no noticeable slowdown in net subscriber additions.

Meanwhile, analysts have projected Netflix will rake in around $1 billion in additional top-line revenue in 2019 from the rate hikes in the U.S. alone. As of the end of 2018, Netflix reported 58.5 million U.S. streaming customers (out of 139 million worldwide).

For now, Netflix remains one of the most powerful brands in media — a position that reinforces its pricing power. The company was the fastest-growing U.S. brand from 2018-19 in terms of its increase in estimated brand value, according to consulting firm Brand Finance. Netflix was the No. 3 “most loved” brand in America overall, behind Amazon and Google, and was No. 1 among millennials, per a Morning Consult 2019 survey released Wednesday.

Even at $12.99 per month, Netflix’s Standard plan — its most popular package — still undercuts HBO Now ($15 per month) although it’s now going to cost more than Hulu’s ad-free VOD plan ($11.99 per month). According to a report last fall by Wall Street analyst firm Piper Jaffray, Netflix has been in a solid position to raise streaming prices on a regular basis, based on its survey of about 1,100 U.S. Netflix users that found 71% said they felt content on the service has improved.

Netflix’s price increases come ahead of streaming VOD launches by Disney, Apple, AT&T’s WarnerMedia and Comcast’s NBCUniversal — and by charging higher fees, Netflix, as the market leader, may actually put a damper on uptake for rival SVOD offerings.

The boom in subscription streaming services has resulted in a feeling of “subscription fatigue,” according to Deloitte’s 2019 Digital Media Trends survey. Almost half (47%) of U.S. consumers say they’re frustrated by the growing number of subscriptions and services required to watch what they want.

Consider that U.S. consumers are willing to spend a total of around $38 per month for all their streaming services, according to research firm Magid. With Netflix’s $13-per-month Standard plan now around one-third of that, that means there’s even less share of wallet for the rest of the SVOD market.

Correction: An earlier version of this story reported that all of Netflix’s customers will see a price increase in May. In fact, according to Netflix, the company has been gradually moving existing subscribers to the higher pricing since January, depending on their billing cycle.

More Digital

  • New, Likely Cheaper Galaxy Home Speaker

    Samsung Is Getting Ready to Introduce Second Smart Speaker

    Samsung still isn’t selling its Galaxy Home smart speaker, but the company may be getting ready to introduce a second model soon: An FCC filing for an “AI speaker” suggests that the new model, like the original Galaxy Home, will be dual-branded, featuring both Samsung’s own brand name as well as that of its audio [...]

  • Streaming Placeholder

    TikTok Owner Preparing Streaming Service to Rival Spotify (Report)

    ByteDance, the Beijing-based owner of the TikTok video app, is developing a paid streaming music service aimed at the same emerging markets that Spotify and Apple are seeking to explore, according to a report in Bloomberg. The app could be introduced as early as autumn, according to the report, which adds that the company has [...]

  • VidCon-Now-Stacey-Kelly

    VidCon Launches First Original Series to Promote Creators Year-Round

    VidCon brings together thousands of fervent fans at its annual conventions, who flock to the events to see their favorite YouTubers and other digital celebs in the flesh. Now the Viacom-owned division is trying to keep the excitement burning during the VidCon off-season, too. This week VidCon is launching its first foray into original content [...]

  • Stranger Things

    Coca-Cola Will Revive New Coke in Alliance With Netflix, 'Stranger Things'

    A rush of TV watchers to streaming video has prompted Coca-Cola to test an interesting pour. Coca-Cola will bring New Coke back to market for a brief time, all part of a partnership with Netflix, which has featured Coke in its cult-favorite series “Stranger Things.” The third season of the series, set in 1985, will [...]

  • Lauren Dolgen Exits as BuzzFeed Studios

    Lauren Dolgen Exits as BuzzFeed Studios Boss After a Year

    Veteran TV producer Lauren Dolgen has departed as head of BuzzFeed Studios after one year in the job. BuzzFeed had hired Dolgen, a longtime MTV producer who worked on shows including “Teen Mom” and “16 and Pregnant,” as head of BuzzFeed Studios to oversee the company’s slate of original content. Based in L.A., she had [...]

  • Snap-Derek-Andersen-Lara-Sweet

    Snap Fills Out Senior Ranks With CFO, HR Chief Appointments

    Snap CEO and co-founder Evan Spiegel has turned in house to fill the company’s CFO and head of human resources positions, completing an overhaul of the Snapchat parent’s executive ranks after a series of high-level departures. The company announced the appointment of Derek Andersen, currently Snap’s VP of finance, as chief financial officer. Andersen will [...]

More From Our Brands

Access exclusive content