Netflix is testing price increases for UK subscribers.
The streaming giant is one of the dominant forces in the online video space, with 130 million subscribers worldwide. As it expands, though, it faces growing costs, not just in terms of marketing but also investing in content to tailor to each target market and audience group. As it looks to move from licensing third party titles to primarily producing its own original content, it is also increasingly signing deals directly with creators such as Ryan Murphy and Shonda Rhimes.
All of this means that it’s no surprise that Netflix has been looking to raise its prices, bumping subscription fees in the USA at the start of the year. While that was solely restricted to American customers, though, Netflix has now confirmed that it is testing higher prices for British users.
The service normally splits into three tiers – Basic (£5.99 a month), Standard (£7.99) and Premium (£9.99), the latter of which includes 4K content. Now, users have reported seeing higher values on the site, with prices of £6.99, £9.99 and £12.99 a month respectively. Others, however, have reported seeing £5.99, £8.99 and £11.99.
Rather than an official plan to change prices – at least, not yet – the differing figures are part of a test by Netflix to determine how the service is valued and what kind of price points might be acceptable for UK users.
“We are testing slightly different prices to better understand how members value Netflix,” a spokesperson told Digital Spy. “Not everyone will see this test and we may never roll out these specific prices beyond this test. Our goal is to ensure that Netflix is always great value for money.”
Netflix UK prices will not rise for now
16th January 2019
Netflix UK prices will not rise for the immediate future, despite prices jumping for subscribers in the US.
The streaming giant, which currently has around 137 million subscribers worldwide, is poised to announced its latest figures for Q4 2018 this week. In the third quarter of last year, it saw record growth, adding 7 million subscribers – up 31 per cent on the 5.3 million added in the same period of the previous year.
That growth, though, is driven by a staggering investment in original content, in addition to the costs of marketing in target areas: Netflix spent more than $8 billion on content in 2018 alone, with some projecting that investment would rise as high as $13 billion. With a reported $80 million spent by Netflix just to keep the sitcom Friends on the service, the balance between Netflix’s subscription revenue and its outgoings is an ongoing tightrope act.
As a result, Netflix has raised its subscription fees multiple times over recent years, freezing existing customers for certain periods and gradually phasing in the higher monthly costs. US customers were surprised yesterday, then, when Netflix announced a price hike of between 13 per cent and 18 per cent, with its Basic plan up from $8 a month to $9, its Standard plan (up to 2 screens simultaneously in HD) climbing from $11 a month to $13 and the 4K Premium plan from $14 to $16.
Netflix, however, tends to raise its prices incrementally worldwide, with different markets seeing price changes at different times, as each country has different membership sizes, different household incomes and different content libraries. While prices may well climb on British soil in the future, Netflix has confirmed to multiple publications that the US price hike is just that – a price hike solely for American costumers.
“Price increases are specific to each country and the US increase does not influence or indicate a UK price change,” a spokesperson told Digital Spy.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,” Netflix told the BBC, adding the US bump was not an indication of global pricing plans.
Shares in the company have risen by more than 5 per cent following the news, as Netflix braces itself for fresh competition from Disney and NBCUniversal, which have their own plans to launch streaming platforms in the next two years.