According to the Wall Street Journal, Netflix is considering another increase in the cost of its streaming service, with the projected price hike to be issued a few months after the conclusion of the Hollywood actors strike. The strike could end in the upcoming weeks. The streaming giant plans to implement these price changes initially in the US and Canada, before extending to other global markets.
Unclear details on the price hike
The ambiguity remains concerning the exact amount of the price increase. Earlier, Netflix hiked prices for all its plans last year that led to elevating the cost of the ad-free Standard tier to $15.49 per month and the Premium plan to $19.99 per month. Besides, it introduced a $6.99 per month ad-supported plan and discontinued its mid-tier $9.99 per month basic ad-free plan. To curb unauthorized sharing, Netflix introduced an additional $7.99 per month charge for account sharing outside one's household earlier this year.
Effect on Hollywood and Beyond
This decision comes as Hollywood gradually resumes its work. The Writers Guild of America (WGA) ended its strike and is currently voting on a contract with major Hollywood studios, including Netflix, that could significantly impact the streaming landscape.
Under the new contract, streaming services such as Netflix, Disney Plus, and Hulu need to share streaming data with the WGA, consequently allowing writers to understand the performance of their content. Additionally, the contract promises writers of streaming features a minimum compensation hike of 18% for high-budget films and a 26% increase in residuals. The cost of this new contract is reportedly only 0.2% of Netflix's annual revenue. However, the Hollywood actors are still on strike, pausing some productions. These developments and contract terms may influence Netflix's decision to raise prices.
Furthermore, the Wall Street Journal also suggested that Disney Plus could introduce a new live sports tier outside the US vicinity. Similar to Netflix, Disney Plus isn't avoiding price hikes either, and their most recent increase will come into effect later this month. As Hollywood moves closer to returning to work, there will likely be an influx of new content that might justify these price increases from Netflix.