Netflix has recently raised the prices of its subscription plans in the United States, Canada, Portugal and Argentina. The standard plan that enables HD streaming on two devices will cost $17.99 per month, $2.50 more than the current $15.49 price. The premium plan is also being raised to $24.99 from $22.99 per month. These changes come after Netflix added a record 19 million new subscribers in the last quarter to take its global subscriber base above 300 million.
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This is why Netflix is so confident in its product line and has not been afraid to raise prices. The company has been spending a lot of money on the original content, for instance, the new season of “Stranger Things” and the praised “The Crown,” which are still pulling and retaining subscribers. As for the subscription fees, Netflix is hoping that with the price increase it will be able to afford producing more content and remain a major player on the streaming market.
One cannot attribute the increase in subscribers to original series and films alone. The attraction of new users was also due to the strategic expansion into live programming with features like the Mike Tyson vs. Jake Paul fight and NFL games on Christmas Day. This expansion into live content is part of a larger expansion plan for Netflix to expand its content offering and reach new audiences.
However, there are some analysts who share the view that this growth may not be sustainable. This is because the streaming industry is growing closer, and the rivals are Disney+, Amazon Prime Video, and Apple TV+. There are also some concerns about transparency since Netflix has decided to no longer report subscriber numbers on a quarterly basis and instead has shifted its focus to core financials and operating margins. The company has set its eyes on a 29% operating margin and is expecting $43.5 billion to $44.5 billion in sales in 2025.
Some subscribers have taken to social media to protest the price increase, which they say is too much for the service they are receiving. But Netflix defends the increases, saying it needs to spend money on producing good programs and improving the customer experience. The company believes that it has a vast library of content and innovative features that will continue to provide value to subscribers at the new prices.
In the future, Netflix is planning to increase the content library with the possibility of live sports and interactive shows. These initiatives are expected to extend the audience base and also retain the current subscribers. Netflix has always been innovatively inclined and diverse in content production and these are some of the areas it has embraced in order to remain the leading streaming service provider.
Therefore, it is possible to assert that the recent price increase of Netflix and the increase in the number of subscribers demonstrate the effective strategy of improving the content and strengthening the market position. However, in the controversial environment of the streaming services, the company’s strategy of continuous content development in different languages and of high quality should help to maintain subscribers in the future.
