Netflix's overnight decision to suddenly raise the prices of its subscriptions has prompted complaints among users, with some threatening to cancel their plans.
Many viewers who were subscribed to Netflix in order to binge their favorite shows through Apple surprisingly saw their fee go up earlier this week. The sudden price hike was actually implemented earlier this year.
Netflix's Subscription Rate Increase
The streaming media company decided to scrap its Basic ad-free plan, which costs roughly $6.99 per month. This particular decision has only just recently come into effect for users who were being billed through iTunes.
Apple decided to remove this option to pay through their service a short while ago and the streaming giant said that members would now have to pay Netflix directly. However, many customers are not exactly excited about the change as they said that the previous method was a "convenient" way to pay.
One user posted on X, formerly known as Twitter, slamming the latest development, saying, "Guess I'll be canceling my Netflix account." With the removal of the streaming media company's Basic ad-free plan, users who are not canceling their subscriptions will have to choose whether they pay less and tolerate ads or pay more every month to remain ad-free, as per Ladbible.
On its website, Netflix said that the Basic plan is no longer available for new or re-joining members, adding that if users are currently on it, they can remain on the plan until it is changed or their account is canceled.
Netflix was expected to increase its subscription rates this year, which is a move that should accelerate the company's revenue and earnings growth. The situation comes as it continues to take a bigger chunk out of overall TV viewing.
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Complaints Among Users
In a Feb. 27, research note, the lead of UBS Securities analysts, John Hodulik, said that they expect to see rate increases this year. This, along with a ramp=up in revenue from Netflix's ad-supported tier and health subscriber gains, should place the streaming giant's total revenue growth in 2024 at 15%, which is more than double the 7% last year.
Netflix increased the price of its Basic plan last October from $9.99 to $11.99 per month in the United States. The company also decided to increase the prices of its subscription plans in the United Kingdom and France, according to Variety.
During the streaming giant's Q4 2023 earnings call, Netflix CEO Greg Peters noted that last year, the company had "largely put price increases on hold." This came while it was rolling out the paid-sharing program.
Peters added that they will continue to monitor other countries and try and assess when they have delivered enough additional entertainment value before asking customers to pay a higher price for their subscriptions.
The latest price hike also comes after Netflix previously cut subscribers off their Apple iTunes billing plans in some countries. The company's spokesperson, MoMo Zhou, said in an email that the changes affect members who are on the basic plan and who were using iTunes as a mode of payment, said The Verge.
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