Streamers like Netflix have revolutionized how we watch TV and movies by offering control and convenience to consumers. But the streaming company may be looking to increase that price tag once the Hollywood actors’ strike ends.
According to a Wall Street Journal report, Netflix plans to increase its prices for its ad-free service “a few months” after SAG-AFTRA’s strike ends. The company is reportedly discussing raising prices in several markets globally but will likely begin with the United States and Canada. It needed to be clarified how much the prices would be increased or when they’d take effect, but the WSJ did note that it has raised its subscription rates multiple times in recent years.
It’s also worth noting that the news comes as the WGA writers’ strike ended last week, and SAG-AFTRA resumed negotiations with the Alliance of Motion Picture and Television Producers. Both sides are reportedly making progress in the talks, but it’s unclear whether this point will resolve the strike.
Netflix has been implementing other strategies to get more money from its subscribers, such as charging an extra monthly fee for households that share their accounts with people outside the household and cracking down on password sharing. But it would be a bold move for the company to raise prices to return to profitability after years of losses.
While it’s true that more and more Americans are cutting the cord from traditional cable providers, whether these customers will be willing to pay higher fees for ad-free streaming services remains to be seen. If they do, however, this could encourage other online streaming services to follow suit and charge higher subscription rates.
Netflix’s ad-free service offers a large selection of current and past hit TV shows and dozens of original films and series. It also boasts a vast library of older movies that have been made available to its subscriber base. However, the company has struggled to profit since launching its first ad-supported tier in 2013.
Throughout its history, Netflix has faced numerous challenges and obstacles threatening its business model and profitability. However, its investors have been patient, and the company has continued to invest in its platform while experimenting with different advertising models. If it can figure out a way to break even on its ad-free tier, that could lead to its long-term survival as a profitable company. But for now, it will have to keep putting its efforts into that ad-free tier to attract and retain users. As a result, its shareholders have been pleased with its performance over the past year, and the company’s shares are up more than 3% on Tuesday. This article originally appeared on Mint.com and was written by Alex Weprin.
