Introduction:
Netflix made a great profit since the lockdown as people had been stuck in their homes due to the coronavirus.
However, as the competition is increasing in the market, Netflix announced that it is raising the prices of its standard and premium packages.
They announced that the basic plan will remain at its original price that is of $9. But the price of the standard package has been increased from $13 to $14 a month while the price of the premium package has been increased from $16 to $18 per month.
The customers that have joined it or are planning to join will have to give the updated fees. The users that already have an account will pay the fees in their next billing cycle.
Netflix raised its prices back in 2019:
The last time when Netflix raised its prices was back in January 2019 and people were expecting this to happen sooner or later.
Netflix is trying to increase the prices country by country so that their net income isn’t affected globally. Previously, they announced the change in prices in Canada, and now it’s the USA.
Increased competition:
A few years ago, when Netflix started its major competitor was Hulu in the streaming market. However, today there are many other competitors in the market which include YouTube and many other video games.
The competition is so high that in the U.S alone. Because users have many options like TikTok, Peacock, Disney Plus, HBO Max, etc. They have planned to up their game and standards so that their customers don’t go for the latter options.
Big investments cause higher prices:
Netflix is investing heavily in producing better content for their customers. But eventually, all these efforts are making the cost high and everyone is aware of it.
Analyst Ross Benes, an eMarketer says,”Netflix is still underpriced than most of its competitors”. He also added that people get “a lot of value for not a whole lot of money.”
The officials believe that these factors will make Netflix a more central platform for streaming movies and seasons.
Due to the pandemic, people can give an extra dollar or two for getting excellent services that Netflix provides to its users.
Co-Ceo of Netflix, Reed Hastings says that he is fine with losing some customers as they will eventually gain more customers due to the perks and benefits provided by Netflix.
Conclusion:
The aim of the company is to create many high-quality hits so that once people join the platform, they won’t sway to any other services in the market.
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