Despite Record Earnings and Low Costs, Netflix To Raise Subscription Prices Yet Again
But is it passing on profits to the actors? Of course not.
Despite record quarterly earnings and record new subs, Netflix is still planning to raise their prices for certain subscription plans while also having spent less money this year due to the strikes. To rub salt in an already smarting wound, they still, along with other members of the AMPTP, are refusing SAG-AFTRA’s demands, blocking strike negotiations still further.
The streaming giant has announced that monthly charges for US viewers will cost $3 more per month (reaching $22.99), in the UK it would rise by £1 to £7.99, and in France, premium subscribers will pay an extra €2 (reaching €19.99).
When Netflix increased its prices in 2022, at least it had some sort of justification. April last year saw Netflix report a loss of subscribers for the first time since 2011. In a market with increasing competition from Disney+, Prime Video, Paramount Plus, Max, and so many more we can hardly remember all their names, it seemed annoying but perhaps understandable for prices to increase.
Now, however, there’s no such excuse. The streaming platform far exceeded its third-quarter financial expectations, reporting a significant rise in subscribers thanks to its cheaper ad-based platform and the crackdown on sharing passwords, resulting in more individual sign-ups. In. fact, the company said subscriptions to the ad plan rose 70% on a sequential basis, and 30% of sign-ups are on the cheaper ad tier in the countries where it is available, as reported by Deadline. As a result, Netflix is revenue-positive in all regions (all right for some).
This boost in profit is likely at least partly due to having spent less during the strikes, with the company saving an estimated $1 billion on reduced content spending. During strike negotiations, Netflix maintained it wanted to do all it could to come to a resolution–except give up any of these billions to the actors who make their shows possible, of course.
“We want nothing more than to resolve this and get everyone back to work,” said Netflix co-CEO Ted Sarandos on an Oct. 18 earnings call. “That’s true for Netflix, that’s true for every member of the AMPTP. It’s why our member CEOs have prioritized these negotiations above everything else we’re doing.
“We spent hours and hours with SAG-AFTRA over the last few weeks and we were actually very optimistic that we were making progress. But then at the very end of our last session together, the guild presented this new demand that, kind of on top of everything, for a per subscriber levy unrelated to viewing or success and this really broke our momentum unfortunately.”
So what unholy amount were SAG/AFTRA asking for that broke down negotiations, considering Netflix will soon earn $3 more per American viewer? $0.57.
Considering Netflix is a company that has managed to save money during the strikes and, on top of that, is on track for a highly successful holiday season, you would imagine that at least some of the increased prices its subscribers are paying could go towards the actors who become the face of the shows on the platform. But perhaps that was simply hoping too much.
(featured image: freestocks on Unsplash)
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