The video-on-demand service relies on this increase to help finance its growing investments in the creation of original content.
The news should not enchant the loyal US subscribers of Netflix. The video-on-demand service announced Tuesday, January 15, an increase in prices for its subscriptions across the Atlantic. This rise, the fourth since the launch of its streaming service, twelve years ago, promises to be the largest in the history of the platform. According to the formulas, the monthly subscription rates will rise from 13% to 18% on average.
All new subscription plans are now affected, including the entry-level option, which has so far been spared, which now ranges from $ 7.99 to $ 8.99 (from $ 7 to $ 8). an increase of 12.5%. Intermediate supply, which is the most popular with the public, is also the one that is experiencing the greatest increase, of the order of 18.2%, while the most expensive subscription, which includes a broadcasting programs in very high definition, evolves from $ 13.99 to $ 15.99 (+ 14.3%).
Netflix is counting on this price recovery to help finance its massive investments in home-grown production and its international expansion. By 2018, he would have invested more than 8 billion dollars in his catalog, relying more and more on original creations, like the series. Stranger Things or movie Bird Box.
To establish itself as an international reference
" We change prices from time to time as we continue to invest in high quality entertainment and enhance the overall experience " the Los Gatos Group (California) was justified. The US market represents a significant financial windfall for Netflix, which has more than 58 million subscribers, or approximately 42% of its customers. Other countries on the continent, exceptions made from Brazil and Mexico, should be concerned by this new pricing. Europe, for its part, is currently preserved.
The stakes are high for Netflix, who hopes that this increase of 1 to 2 dollars per month will not scare subscribers. Opting for a debt financing strategy, the US giant has not looked at spending in recent years to build its empire of streaming and establish itself as an international reference. The video-on-demand platform, now valued at $ 154 billion, is now available in more than 190 countries.
The focus on home productions is strategic. Although very expensive for Netflix, they represent a way to differentiate themselves in an increasingly competitive market. Indeed, after Hulu and Amazon Prime, the competition should intensify with the arrival of heavyweights this year like Apple, Disney, Comcast and the operator AT & T. For now, Netflix's strategy seems to convince the markets. As the group prepares to present its results on Thursday, Jan. 17, its title gained 6.5% on Tuesday.