Imua 'Iolani

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Netflix's Subscription Pricing Raise

January 30, 2019

     Streaming service Netflix, a $153 billion company, is raising prices for its customers in the United States as a response to an increase in company-produced content. With the company offering three different plans for consumers ($8 for standard-definition, $11 for high-definition, $14 for 4K), prices will rise by just $1 to $2. Current members will be subject to the increase over the coming months, while new subscribers will immediately incur the greater fee.

     “It does not make much of a difference to me; my sister pays for it,” said Korn Jiamsripong ‘21. “But even then, $12 is not bad for all the programming they offer.”

     Making a change from the conventional selection of movies and shows, Netflix has placed an emphasis on in-house content over the past year. Netflix’s confidence in this project shows as the company takes on a major financial burden to make it possible. According to CNN, the streaming service is expecting a negative free cash flow of $3 billion in 2018, with similar expectations for the coming year. Free cash flow measures how much money is generated after a company covers investment expenses in its business. However, Netflix’s increased spending appears to be paying off as the company reported 58 million subscribers in the United States and 137 million abroad. These figures reflect a 40 percent growth rate from the previous year.

     In conjunction with these price raises comes the entrance of competing streaming services. Big names such as Disney are putting their name in the digital media market, with their Disney+ platform that will cover brands like Star Wars and Marvel. NBCUniversal announced a streaming service expected to launch in 2020. Perhaps the greatest competition will derive from Apple, with many anticipating an introduction to its own service in the coming months.

     Some say Netflix is looking to capitalize on the buzz surrounding recent releases such as “Black Mirror: Bandersnatch” and “Bird Box.” The latter spawned an internet sensation, the eponymous “Bird Box Challenge,” while the former has been lauded as a first of its kind in the movie industry. Further propelling Netflix toward the summit of the movie industry was the nomination for best picture at the Academy Awards for “Roma,” a “semi-autobiographical take on director Alfonso Cuarón’s upbringing in Mexico City.” For now, things appear to be on the rise for the world’s largest streaming service.

     “They may overtake theaters. I mean, you spend $10 on a single movie ticket, and that same amount will get you as many as you want from Netflix. It is a genius plan,” said Braden Tadaki ‘21.

 

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