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  • Writer's pictureAaron Fonseca

Netflix Plans Price Hike Post Strike

This week's Your Nerd Side Show:

Netflix has announced plans to hike up its ad-free tier prices "a few months" after the joint strike of the Writer’s Guild of America (WGA) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA). This is part of a move from nearly all streaming platforms with tier service plans and ad and ad-free options.

The Wall Street Journal reports that Netflix intends to raise its ad-free subscription price in the months following the strikes’ resolution, although the exact amount is not specified and Netflix representatives have not commented further. The WGA has been on strike since May 2nd, with SAG-AFTRA joining them on July 14th. Writers have reached a tentative agreement with studios, while actors are back at the negotiating table in hopes of being better compensated. Some of their demands include getting residuals from streaming services, which previously had been allowed to stream shows and movies without paying a portion of their revenue to those involved in performing or writing the content.

In the last 12 months, the cost of ad-free streaming has increased consistently by about 25%. Hulu has increased its ad-free service from around $15 a month to $18. Likewise, Warner Bros. Discovery recently announced an increase in its ad-free Discovery+ service, from $6.99 to $8.99. This trend shows a desire to move many subscribers into ad-supported plans. "We’re obviously trying with our pricing strategy to migrate more subs to the advertiser-supported tier," Disney Chief Executive Bob Iger said during an investors call in August. Warner Bros. Discovery has also announced its plan to offer live sports for an additional $9.99 through Max, and Disney+ is looking to offer a similar live-sports add-on.

Despite not raising its prices since January 2022, Netflix has used other tactics to increase revenue from existing subscribers. The platform has also cracked down on account sharing, asking users to pay a fee in order to share an account with people who don’t live in the same household. Netflix has also kicked "freeloaders" off accounts that they don’t pay for, with the idea that this will encourage more people to acquire the service for themselves. Although not an explicit increase in subscription price in itself, it has been shown that over 100,000 households watched Netflix through a subscription other than their own.

Netflix is set to increase its subscription price by an unspecified amount in the months following the end of the joint WGA/SAG-AFTRA strikes.

Source: The Wall Street Journal

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