Netflix Plans Across-the-Board Price Increases

Netflix announced plans to raise prices for all of its product plans this week. Wall Street welcomed the news, sending the stock up 6.5 percent. As for the plans being increased, here’s how it all breaks down:

Basic: Stream Netflix to one device in standard definition, download titles to one phone or tablet. Now costs $9 (was $8).

Standard: Stream TV shows and movies to two devices at the same time, including in HD when available. Content may be downloaded to two devices or tablets. Now $13 (was $11).

Premium: Stream TV shows and movies to up to four devices at the same time, in SD, HD, and UHD when available. PC users should be aware that streaming in 4K still requires lots of hoop-jumping. You may also download to four devices or tablets. Now $16 (was $14).

These price increases of 13-18 percent are the largest single increases Netflix has inflicted since launching streaming 12 years ago and will take effect immediately for new customers. Existing customers will be grandfathered in over three months.

The extra cash is being billed as a way to pay for the absolutely massive amounts of money Netflix is sinking into making its own content. At the same time, the company faces significantly tougher competition from companies whose libraries it once reliably counted among its own strengths. Disney’s upcoming streaming service will siphon a huge amount of material off Netflix. A report from the analytics firm Jumpshot, released just before Christmas, showed off Netflix’s reportedly most-popular shows — and the ones it could lose access to, given that they’re owned by rivals.

That’s the other reason for Netflix’s rising prices — it’s paying through the nose for the content it licenses, with a $100M deal required to preserve its access through 2019 alone. Netflix’s content library is a gorgeous example of a long tail, in which tons of content is interesting to relatively small audiences, with few big, crossover hits.

At the same time, the price of cable-cutting is continuing to increase, while the number of services one needs to subscribe to in order to accomplish the trick has been doing nothing but rising. As more companies have gotten interested in launching rival streaming services, we’ve seen a steady proliferation of these offerings. Want to watch Star Trek? You’ll need CBS All-Access. Stargate SG-1, Stargate Atlantis, and Doctor Who are all on Amazon Prime, even though some of these were also on Netflix, once upon a time.

Maintaining regular access to content requires leaping from service to service — or, of course, you could do what these companies actually want, subscribe to all of them, and just keep paying the cable bill. At the same time, we’ve also lost significant amounts of content off Netflix, at least if you’re a fan of the MCU TV shows that once ran on the platform. With shows like this vanishing, the importance of Netflix to one’s streaming service lineup has never seemed weaker.

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