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Janeen Bahrke

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Aug 2, 2024, 9:36:00 AM8/2/24

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According to an October 3 Wall Street Journal report, Netflix could be next. The company plans to raise prices on its ad-free service in the U.S. and Canada a few months after the actors strike ends, and it is looking at several other markets worldwide, according to the report, which cites sources familiar with the situation.

These streaming services join several others that recently announced price hikes, especially for ad-free service. These include Amazon, which last month announced plans to add commercials to its Prime Video streaming service in early 2024, unless members opt for an ad-free version for $2.99 per month.

At Warner Bros., the monthly Discovery Plus increase became effective on October 3. The company said in a statement that this is the first increase for the service in the U.S. and Canada since it was launched in January 2021.

With some of the biggest streaming platforms raising rates, you may want to check out other options. For tips on how to save money while making sure you get to watch some of the must-see releases, check out our round-up of how to save on streaming services and find streaming deals.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration. "}), " -0-11/js/authorBio.js"); } else console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); Joey SolitroSocial Links NavigationContributorJoey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.

Its most popular plan will see the largest hike, to $13 per month from $11. That option offers high-definition streaming on up to two different internet-connected devices simultaneously. Even at the higher price, that plan is still a few dollars cheaper than HBO, whose streaming service charges $15 per month.

This marks the fourth time that Netflix has raised its U.S. prices; the last hike came in late 2017 . But this is the first time that higher prices will hit all 58 million U.S. subscribers, the number Netflix reported at the end of September.

Previously, Netflix had continued to offer a basic, $8-a-month streaming plan while raising rates on more comprehensive plans with better video quality and options to watch simultaneously on different devices.

The new prices will immediately affect all new subscribers and then roll out to existing customers during the next three months. Customers in about 40 Latin America countries where Netflix bills in U.S. currency will also be affected, excepting key international markets such as Mexico and Brazil.

Higher prices could alienate subscribers and possibly even trigger a wave of cancelations. For instance, Netflix faced a huge backlash in 2011 when it unbundled video streaming from its older DVD-by-mail service, resulting in a 60 percent price increase for subscribers who wanted to keep both plans. Netflix lost 600,000 subscribers after that switch.

The company is now betting it can gradually raise its prices, bolstered by a string of acclaimed hits during that past five years that have included "House of Cards," ''Orange Is The New Black," ''Stranger Things," ''The Crown" and, most recently, the film "Bird Box."

Amazon offers a streaming service as part of its Prime shipping program for $13 per month, or $120 for an annual membership. Hulu sells an ad-free service for $12 per month. AT&T's WarnerMedia unit plans a broader streaming service this year centered on HBO. Walt Disney is gearing up to launch a streaming channel this year.

With Apple also widely expected to join the video-streaming fray, the competition for programming is enabling top directors, writers and actors to charge more for their talents. That has intensified financial pressure on Netflix, which hasn't been bringing in enough money to pay for all its programming and other business expenses.

The company burned through about $3 billion last year and is expecting to do so again this year. To offset the negative cash flow, Netflix has been borrowing heavily to pay for programming. The Los Gatos, California, company had accumulated nearly $12 billion in debt before borrowing another $2 billion in an October bond offering.

Concerns about the stiffening competition and Netflix's ability to sustain its current leadership in video streaming has caused the company's stock price to slide by 21 percent from its peak of $423.21 reached last June. The shares stood at $332.94 heading into Tuesday's trading session.

WASHINGTON (CN) - The U.S. Postal Service cannot raise the cost of sending DVD mailers to competitive rates because Netflix and Gamefly are "captive" to the post office's services, the D.C. Circuit ruled.

Two years ago, the D.C. Circuit approved the Postal Commission's plan to end DVD-mailer discrimination - and Netflix's favored status at the U.S. Postal Service - by equalizing the postage for DVD flats and letters.

GameFly, a video game rental service, challenged the post office's bias in court, claiming that automatic processing often damages DVDs, requiring GameFly to package their discs in heavier - and therefore more expensive - cardboard packaging.

While customers for Netflix's DVD-by-mail service have steadily declined since 2010 in favor of the company's streaming service, it remains highly profitable for the company - considerably more so than streaming, according to court records.

The appeals court ruled that the post office may not classify its round-trip DVD mailers as competitive products, rather than market-dominant products subject to a statutory price ceiling, which is the current classification.

"It should be obvious that as long as the DVD-by-mail business is quite profitable, Netflix has no rational economic course but to pay the market-dominant piper," Judge Laurence Silberman wrote for a three-judge panel.

And while technological innovations may result in a further shift away from the use of mail in favor of streaming, "there was no evidence presented to establish at what point an increase in the price the service charged would cause Netflix and GameFly to look elsewhere for distribution."

Silberman said that Netflix and GameFly could not pass on any increase in postage price to consumers without losing them, which would put the Postal Service in "a position to extract more of the profit margin of its captive suppliers."