Oct 29, 2020 - Economy

Netflix adds $2 charge to premium plan, hikes standard plan by $1

Illustration: Sarah Grillo/Axios

Netflix announced Thursday it will charge customers $14 for its standard monthly subscriber plan and $18 for the premium plan, the Verge reports.

The big picture: The business model behind Netflix's strategy is to accumulate as many users worldwide with as much original and licensed content as possible, and then hike the monthly subscription prices on those users once they are hooked.

The basic plan will remain $9 per month, per the Verge.

Between the lines: Some big entertainment companies are eyeing price hikes to make up for pandemic headwinds. Spotify hinted at its own cost increase in a Thursday earnings call and both companies gave modest Q4 guidance.

What they're saying: "We understand people have more entertainment choices than ever and we're committed to delivering an even better experience for our members," a Netflix spokesperson told CNET.

"We're updating our prices so that we can continue to offer more variety of TV shows and films — in addition to our great fall line up. As always we offer a range of plans so that people can pick a price that works best for their budget."

The bottom line: Generally speaking, streaming TV is getting more expensive, making it less of an affordable alternative to cable.

Editor's note: This story has been updated to reflect that Netflix's standard plan will increase by $1 and the premium plan will increase by $2.

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Netflix adds $2 charge to premium plan, hikes standard plan by $1

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