Netflix raise prices again. A few days ago we communicated the new price increase of the most popular streaming video platform, an increase that affects two of its three plans and that, in addition to Spain, has been established in the rest of the world. In this way, Netflix has increased its subscription cost by 50% for just five years. If we stop to think about it, it is a fairly large increase and, although we do not notice it too much, since the increases have been made very little by little, if you look at the initial price and the current price, the difference is pretty big.
The platform arrived in Spain in October 2015 with prices ranging from 7.99 euros for the basic plan to 11.99 euros for the premium plan, an amount that is far from today’s reality and that is that the premium plan now it has a cost of 17.99 euros. But, how has the subscription price evolved in Spain? Below we show you how the platform has been raising the price of subscriptions.
The evolution of the price of the Netflix subscription
Just as we have seen how the price of electricity, the price of gasoline or the price of food has risen, the most popular streaming video platform has also joined the bandwagon of uploads, something that other platforms have decided not to do, as is the case with HBO Max, which has maintained the price even with its new launch.
Netflix’s basic plan is the only one that, for the moment, has not changed and is that, after all these years, it continues to remain at 7.99 euros. These are the price increases:
But why does the platform make these systematic price increases every two years? There are many reasons that the platform may have for this price increase, and not only the fact that many people share the accounts, but it must be taken into account that, little by little, Netflix is leaving behind the expansive growth model, in which he reinvested all his profits, to increase spending on the creation of new original content, which is what we have been seeing the most in recent months. So far, Netflix has been raising prices every two years on its standard and premium plan. The basic plan is the one that, for now, has not dared to touch, although we believe that very soon there will also be changes in the price of this subscription plan, something that we have only seen in the United States that, since 2019, has changed the way to raise prices and now the increases are annual and not biannual.
It is estimated that in 2020 the platform spent $17 billion to create its own content, something that has become totally necessary to be able to compete with the rest of the platforms that also have their own original content. This means that Netflix is no longer just a platform that serves as a distributor of content to third parties, so the income has to be higher to continue operating.
The rate of subscribers who unsubscribe has increased in recent years, and there are many who jump from one platform to another for months, users who do not want to commit to any of them and who prefer to subscribe when they want to see a series or a complete movie. This may seem counterproductive with the rise in prices, but it is really one of the reasons why prices have been rising little by little. Netflix needs to earn more per user.
Likewise, there has been a stagnation in growth and it is that, after gain 16 million users during confinement in 2020, that increase in subscribers has notably stagnated, something that the platform itself has already warned its investors.
So, apparently, Netflix wants to keep the users of the basic plan, those who have not paid more than 7.99 euros since they joined the platform, and test the subscribers of the standard and premium plan, how? Raising the price and seeing how much they are willing to pay. This is a very risky bet, especially considering that other platforms have much more competitive prices and even have cheaper annual subscriptions, something that Netflix has not yet considered. In addition, the fact that the trial period has been canceled has meant that many people do not register on the platform to try it out, as they have to make a payment from the first moment.
Of course, it is important to bear in mind that this price increase has not only been made in Spain. The platform has raised prices in all the countries where it has a presence.
The rise in prices in Latin America
In Latin America, this increase has been very noticeable in recent years and its initial prices were very cheap since the platform itself announced that it wanted to offer quality content at an affordable price in these Central and South American countries. But now, a few years later, it seems that prices are much higher. In some countries they are almost equal to U.S, as is the case in Uruguay, where the premium plan costs 15.99 dollars per month (in the United States the price is 17.99 euros per month).
How have the prices been in some of the Latin American countries after this increase? We are going to know what the quotas have been in some countries.
The increases have been drastic in some countries while in others, as is the case of Bolivia, the same prices remain, at least for the moment, as in 2019, since it seems that it has not affected the general increase.
How much more will the price of Netflix continue to increase in the coming years? Will they implement the annual increase as in the United States in the rest of the countries? We will have to wait to see it.