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OPINION: Netflix is giving its subscribers a decision to make with its latest price rise, and it may see them scurrying off to pastures new (and cheaper).
I’ve written a lot about video streaming services these past few months. It was not long ago that I was talking about services becoming risk averse and the fact that there are now just too many to choose from. And now I’ve got price hikes on the brain.
With the announcement that Netflix is to raise its prices “effective immediately” in the UK & Ireland, the Basic and Standard package is up by £1 and the Premium tier up by £2/month. While in isolation it doesn’t look a big increase, the Premium tier costs £16/month (or £15.99 if you want to be pedantic). There was the usual kerfuffle over paying the licence fee but compare the two services and the BBC’s massive range of services costs £159 while Netflix is charging £190/year to watch in 4K HDR. That’s a lot.
The justification of the increase is that it will help Netflix continue to invest “in best in class UK productions and offer a wide variety of curated quality shows and films” is similar to what they said in January 2021, where that increase reflected the “significant investment made in new TV shows and films”. Who is to say in a year’s time subscriptions won’t go up again with this justification trotted out for another airing? Will each time Netflix add a feature (8K?) mean prices go up? It adds an unnecessary sense of nervousness about the whole thing.
With digital streaming services, the genie has been let loose and if subscribers haven’t already realised it, prices are heading in one direction, a contrast against physical media which often gets cheaper over time. The idea of ad-supported tiers with streaming services might hold appeal to some, but even that irritates me. Wasn’t the point of paying for these streaming services so that we weren’t subjected to frequent ad interruptions?
In Netflix’s defence, the UK & Ireland pricing is now not too dissimilar to subscription costs in other regions like the US and France once you run them through a currency converter. But the market is not what it once was. It’s not just it and Amazon Prime Video duking it out as your two obvious options, there’s Disney+, Apple TV+, Peacock, HBO Max (US and parts of Europe), BBC iPlayer, BritBox, Rakuten TV, Sky and many others.
And the services that offer 4K HDR content do so at a more affordable price; in the case of Apple it’s a third of what Netflix is asking and for Disney it’s half. Netflix risks its status as the go to streaming service for the ‘average’ person as new and existing subscribers have been given the opportunity to think about the value they get. Netflix can talk about how much value they offer all they want, but if I or you aren’t watching the service as much for whatever reason, it’s inevitable to seek other options.
The cost is getting harder to accept
The cost is no longer one of those hidden ones we just accept to pay each month. With the cost of living and energy prices rising dramatically, it’s becoming a fairly significant chunk of yearly expenditure just to watch a few video streaming services and something has to give.
Not helping matters is that subscriber growth was down to its lowest rate in 2021 despite the frequent lockdowns, while others are biting into Netflix’s lead. Content is leaving the service, first Star Trek: Discovery, now the Marvel Netflix Disney+ shows starring Daredevil and Jessica Jones. After watching what Netflix has been doing, studios are being more aggressive and Netflix is losing its lustre of being the go-to video streaming service.
Netflix may project a confident air about the increase in competition – they may even get a Best Picture winner at the Academy Awards – but it feels like they’re under pressure. With Netflix cancelling shows before they’ve had a chance to develop, there is a need for big binge-watchable hits or films with plenty of buzz and they’re not always there.
Like the cops and criminals in John Carpenter’s Assault on Precinct 13, Netflix comes across as if it’s under siege – perhaps a tad dramatic – but the next few months will tell whether they’re right to be confident or whether they’re looking nervously over their shoulder. To quote Omar from The Wire “If you come at the king, you best not miss”, though Netflix may have made it easier by shooting themselves in the foot.
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