You can expect to be paying a little more to watch streaming video by the time Stranger Things Season 3 comes out. Netflix just announced that it will be increasing the price on all three of its plans in the United States: the basic plan will go from $8 to $9 per month, the most popular HD/multiple devices plan will go from $11 to $13, and the premium 4K plan will go from $14 to $16.
This marks Netflix's third price hike since it launched streaming video 12 years ago. According to CNBC current subscribers can expect to see the new prices over the next three months, while anyone signing up today will pay the increased price. As a point of comparison, the most basic Hulu plan costs $7.99 and the no-ad version costs $11.99. Amazon Prime costs $12.99 per month, but also comes with free two-day shipping, discounts at Whole Foods, free video games and Fortnite skins.
Despite widespread negative reaction on social media, Netflix's stock is up approximately 21 points, or 6.4% at the time of this writing. The groaning in places like Twitter is to be expected--nobody likes paying more--but it remains to be seen whether or not the groaning will translate into people actually abandoning the service for its growing ranks of competition. Historically, rate hikes have not affected subscriber growth, and have also buoyed the stock price in the past.
Netflix could use the money. The company has dumped a lot of money into producing original content, spending estimated $13 billion on new shows and movies in 2018 with varied success. With Netflix losing content in the face of competitors launching their own services, it relies increasingly on must-see originals to keep people paying the subscription price, not unlike a much higher output version of HBO, which currently costs $15 per month for streaming service HBO Now.
Personally, I'd be surprised to see any sort of mass subscriber exodus, and certainly not anything that would offset the increased earnings. That doesn't mean Netflix is out of the woods. The company is much better at making large quantities of content than it is at promoting the content it does make, and an increasingly competitive marketplace will start to do two things. First, it will make the "buy everything" concept less viable, which is what many viewers do right now with the trifecta of Amazon, Netflix and Hulu. When that happens, it will force people to re-evaluate what they pay for and what they don't, and long-running subscriptions like Netflix would prefer that you don't re-evaluate.
For now, it only takes a few Marie Kondo memes to remind us that the company remains capable of producing the sorts of cultural moments that keep that subscription price a built-in part of being a modern culture consumer, even if that price is $2 higher. Though I'm not sure what Kondo would have to say about my three separate streaming services.
