Netflix UK Hikes Prices As Password Sharing Ban Triumphs

Netflix, the US streaming giant, has announced another price increase for its UK subscribers, less than two years after its last major increase.

However, Netflix’s affordable plan, which includes ads, will not see any price changes. If you don’t mind seeing some ads, your subscription cost will remain the same for now.

It’s also worth noting that Netflix’s basic plan is still used in a lot of pay TV packages (From the sky And BT TVfor example) – so the current price increase may result in price hikes on third-party packages as well.

In addition to the pricing change, we’ll also dive into Netflix’s 2023 third-quarter results, which reveal some surprising insights.

From their ambitious investments in content to their unexpectedly successful campaign on password sharing

New Netflix prices in the UK

The price rise, announced this week, comes amid rising costs of living across the UK, making it a somewhat controversial move.

However, Netflix justifies this by pointing to its heavy investments in content, including original series and movies, and even live sporting events now, with the company spending more than $17 billion on content last year.

For the average UK consumer, the price increase means you’ll have to pay a little more each month if you’re in Basic or beloved Plans.

The Basic plan (only available to existing subscribers who signed up before it was cancelled) sees a £1 increase to £7.99 per square metre, while the Premium plan rises by £2 to £17.99 per square metre.

So, after With the change, Netflix will have the following four pricing plans in the UK:

• Standard with advertising plan in £4.99 per month – Allows you to stream content in Full HD (1080p), on two devices at the same time, with ads.
• Basic plan in £7.99 per month (only for legacy subscribers) – It lets you stream content in HD (720p), on just one device at a time, without ads
• Standard plan in £10.99 per month – Allows you to stream content in Full HD (1080p), on up to two devices at the same time, without ads.
• Premium plan in £17.99 per month – Allows you to stream some content in UltraHD (4K) resolution, on up to 4 devices at a time, without ads.

If you’re on the Basic plan, you’ll pay an extra £12 per year, and if you’re on the Premium plan, that’s an extra £24 each year (assuming you stay subscribed for 12 months, of course).

For new subscribers (on the premium plan), prices have actually gone up. For existing subscribers (either on Premium or Basic plans) – users will receive notifications from Netflix, detailing the exact date of the price increase (usually the next monthly billing date).

Netflix Content Investments

In its letter to investors, published this week as part of Netflix’s third-quarter 2023 results, the company discussed rising content costs.

Netflix is ​​investing heavily in content, spending more than $17 billion last year. The platform has seen huge success with shows like Squid game, LupineAnd Stealing money.

Q3 2023 results indicate revenue growth of 7.8% year over year, which is slightly higher than their expectations due to higher than expected member growth.

This growth has been attributed to paid syndication (aka the infamous password sharing campaign – see more on that below), strong programming, and the continued expansion of streaming globally.

In addition to series and movies, Netflix is ​​also involved in live sports events. The company recently announced the Netflix Cup, its first-ever live sporting event, featuring athletes from… Formula 1: Driving to survive And In full swinglive broadcast on November 14, 2023.

This diversification into sports content could be a strategic move to attract a wider audience and justify price increases.

The rise of ad-supported organics

Netflix’s ad-supported membership is a relatively new offering that allows users to access the platform’s vast content library but with ads sprinkled throughout.

It is tentatively launched in late 2022 As “Basic with Ads,” Netflix’s ad-supported tier offered subscribers access to the majority of Netflix’s content library, but with a slight twist.

For a discounted price of £4.99 per month ($6.99 in the US), subscribers have to endure several minutes of ads per hour.

However, the “essential with ads” tag did not last long. In April 2023, Netflix announced Great upgrade to this classimproving video quality from 720p to 1080p, and allowing two simultaneous broadcasts.

This spike essentially corresponds to the higher-priced “Standard” tier offerings, prompting Netflix to rename the plan from “Basic with Ads” to “Standard with Ads.”

Then, in July 2023, Netflix has canceled its ad-free “Basic” tier Absolutely (for new subscribers) – making Standard with Ads the only low-cost option for watching Netflix.

Since then, subscribers who want to watch Netflix without ads have had to move up to the standard tier, which costs £10.99 per month.

Now, with the ‘basic’ tier price increasing – from £6.99 per month to £7.99 per month – existing subscribers still on this plan are likely to find it more difficult to stay at this tier.

According to Netflix’s Q3 2023 results, ad-supported memberships saw a nearly 70% increase quarter-on-quarter and now represents about 30% of all new subscriptions in the 12 countries where the service is available, including the UK.

This suggests that British audiences have been quite receptive to this new offering, likely due to its lower price and the quality of content still available through this plan.

Netflix password sharing campaign

Password sharing has been a common practice among Netflix users for years – with friends and family often sharing accounts to save on subscription costs.

Although Netflix has been somewhat lax about this in the past, things have definitely changed this year. Last May, Netflix began implementing Measures to limit password sharing.

If you discover that you’re sharing your Netflix password outside of your immediate living environment, you’ll receive an email warning you that continued sharing will result in additional fees.

Specifically, each “additional member” you add to your account will cost an additional amount £4.99 Per month.

The number of additional members you can add depends on your subscription level. For example, if you’re on the Standard plan, you can add one additional member, while Premium subscribers can add up to two members.

The company has since taken action in each region to convert what they now call “borrowing households” to fully paid memberships.

According to Q3 results, Netflix’s new measures have succeeded in converting these “borrowing households” into full-paying members, as demonstrated by the increase in the number of global paid users annually (10.8%) – exceeding the company’s expectations.

Netflix also says that while some users are opting out of these new rules – “cancellation backlash remains low, and exceeds our expectations.”

With Netflix’s success, it’s no wonder other companies are now looking to crack down on password sharing as well.

Last month, Disney+ has also changed its terms in the UKand password sharing across multiple families is no longer allowed.

Is Netflix getting too expensive?

The price increase comes at a time when Netflix is ​​already one of the most expensive streaming services in the UK – unless you take the ad-supported tier into account.

And while the “Premium” plan could be considered a premium tier — with competitors like Amazon’s Prime Video and Disney+ offering competitive pricing and 4K streaming — Netflix’s new pricing strategy could be a double-edged sword.

It remains to be seen how UK subscribers will react to this change and whether the enhanced content offerings and new features will be enough to justify the higher costs.