Netflix reportedly considering price hike once SAG-AFTRA strike is resolved
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Netflix is reportedly considering a price hike on its ad-free plans once the SAG-AFTRA strike is resolved.
News of the potential change was first reported by The Wall Street Journal.
According to sources, Netflix will try price hikes in select markets — likely the U.S. and Canada to start. The sources did not indicate how much the increases would be.
It’s not clear if the price hikes are directly connected to a potential resolution of the SAG-AFTRA strike or the recent tentative agreement studios, including Netflix, reached with the WGA.
However, Netflix has been the single major streamer not to increase prices in 2023. It also could potentially use the strike resolution and the higher costs associated with the new pending WGA deal as a reason behind the price changes.
WGA won key concessions from AMPTP, the trade organization that Netflix is part of set up to negotiate with various unions. Royalties are set to increase under the proposed plan and writers will also get bonuses.
SAG-AFTRA is also seeking to increase actors’ compensation, particularly those who don’t negotiate their own, separate contracts.
Studios are facing potential cost increases once the new deals are finalized, though it’s not clear how much of those costs could be absorbed by simply ordering less content. Streamers, including Disney+, have already shown they are willing to cut back on content licensing costs to improve their financials by cutting content it had already paid to produce — as part of a so-called “streaming purge.”
It’s not clear if Netflix might pare down its content production slate or drop some content.
Netflix’s lack of price hikes in 2023 could be offset, at least somewhat, by its password-sharing crackdown, though that may have had some unwanted effects.