Netflix has made a huge profit since the lockdown as people have been stuck in their homes due to the coronavirus.
However, as competition is increasing in the market, Netflix has announced that it is increasing the prices of its standard and premium packages.
They have announced that the basic plan will remain at its original price of US$9. But the price of the standard package has increased from US$13 to US$14 per month, while the price of the premium package has increased from US$16 to US$18 per month. month.
Customers who have joined or intend to join will need to present updated rates. Users who already have an account will pay the fees in the next billing cycle.
Netflix raised its prices in 2019:
The last time Netflix raised its prices was in January 2019 and people expected this to happen sooner rather than later.
Netflix is trying to raise prices on a country-by-country basis so that its bottom line isn’t affected globally. Previously they announced the price change in Canada and now it’s the US.
A few years ago, when Netflix started, its main competitor was Hulu in the streaming market. However, today there are many other competitors in the market, including YouTube and many other video games.
The competition is so big that only in the USA. Because users have many options like TikTok, Peacock, Disney Plus, HBO Max, etc. They planned to improve their game and standards so that their customers don’t opt for the last options.
Big investments cause higher prices:
Netflix is investing heavily in producing better content for its 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 under-priced by most of its competitors.” He also added that people get “a lot of value for not a lot of money”.
Employees believe these factors will make Netflix a more central platform for streaming movies and seasons.
Due to the pandemic, people may spend an extra dollar or two to get the excellent services that Netflix offers its users.
Netflix co-CEO Reed Hastings says he is ok with losing some customers as they will eventually gain more customers due to the perks and benefits offered by Netflix.
The company’s goal is to create lots of high-quality hits so that once people join the platform, they won’t be turned away from any other service on the market.
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