Netflix raising prices in U.S. and Canada

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Netflix is raising prices for the first time since October 2020.

The new pricing goes into effect Friday, Jan. 21, 2022 and affects both U.S. and Canadian subscribers.

The service’s basic U.S. plan will increase by $1 from $8.99 to $9.99 per month (notably, this plan only allows for one stream and doesn’t include HD).

Meanwhile, the standard plan goes to $15.49 a month from $13.99 and the premium one goes to $19.99 from $17.99.

The new pricing goes into effect for new subscribers Jan. 21, though the streamer is already listing the new pricing in some places. Current subscribers will also be impacted, but will receive a notification with 30 days notice for the price hike and the new rates will go into effect at varying times, depending on billing cycles.

The new prices still keep the three plans below $20 a month and its lowest tier is a penny shy of $10. However, it’s worth noting how each plan’s price hike gets progressively higher — $1, $1.50 and $2, which means that customers using multiple streams and higher quality video are hit harder.

That’s not surprisingly, however, given that higher quality video streams do have higher bandwidth costs that quickly add up — and it’s likely that these “die hard” Netflix subscribers probably end up consuming more content overall — whether it’s SD, HD or UHD.

The new $9.99 basic price essentially means that no plan is available for single digit dollar amounts (assuming you consider $9.99 to be $10).

Canadian customers won’t see an increase for basic plans, but the standard option will go to $16.49 Canadian dollars (about $13.19 USD) and premium goes to $20.99 (about $16.79 USD).

Price increases for subscription services, especially as more and more streaming services pop up, are a sensitive balancing act. The companies have to fight the right balance between what people are willing to pay vs. what pays their bills (and, in the case of public companies like Netflix, pleases stockholders).

As plans get more pricey, it’s common to lose at least some subscribers, though small price hikes can have enough of a cumulative effect on the bottom line to make up for those defectors.

Streaming services also have to contend with the dreaded problem of password sharing where a circle of family or friends will share the same account, though it’s also likely that most services just assume this will happen and factor it in at least somewhat when setting prices. It’s also arguable whether or not the company could actually sign up everyone who uses someone else’s Netflix login if it were to somehow crack down on password sharing.

The price increases are largely seen as necessary to help cover the billions the company spends on content licensing and production of original series.

Like many other areas of the economy, TV and film production costs in general have gone up during the pandemic, driven by a variety of factors ranging from increase set construction material costs to COVID-19 protocols that require funding to higher labor costs and extended and delayed production schedules.