Streaming prices have ballooned across the board, with Netflix (NFLX) becoming the latest platform that will reportedly hike the amount it charges for one of its plans as profitability becomes top of mind for media companies.
On Tuesday, The Wall Street Journal reported Netflix plans to raise the price of its ad-free streaming tier following the conclusion of the ongoing actors strike. The company declined to comment on the report when asked by Yahoo Finance.
SAG-AFTRA, the union that represents approximately 160,000 actors, announcers, recording artists, and other media professionals around the world, is currently engaged in contract negotiations with studios, and a deal could be imminent.
Although the Journal said the exact timeline for a potential Netflix price hike and the amount by which its monthly $15.49 plan would go up is still unknown, the rumored increase echoes recent moves by competitors.
Streaming prices rival cable bundle
Warner Bros. Discovery (WBD), which raised the price of its ad-free Max offering earlier this year by $1 to $15.99, announced that it would raise the price of its ad-free Discovery+ streaming platform by $2 to $8.99, effective Tuesday.
The ad-free versions of Disney+, Hulu, and ESPN+ will rise by more than 20% effective Oct. 12 as Disney (DIS) works to narrow its direct-to-consumer losses and reach streaming profitability by the end of its fiscal 2024. It's the second time this year that Disney has raised the prices of its plans.
Meanwhile Comcast's Peacock (CMCSA) upped the cost of its ad-supported plan by $1 to $5.99 and its ad-free plan by $2 to $11.99 in August. It was the first time Peacock had raised its streaming prices.
In June, Paramount (PARA) launched its Paramount+ with Showtime streaming offering for $11.99 a month — $2 more than the previous price for a Paramount+ subscription. It also raised the prices of its ad-supported tier by $1 to $5.99.
Even cable replacement services like Alphabet's YouTube TV (GOOGL) and Disney's Hulu + Live TV have seen prices leap from prior levels.
YouTube TV jumped to $72.99 from $64.99 in March while Hulu + Live TV with ads will see prices increase from $69.99 to $76.99 next week. The ad-free version will cost $89.99, up from the prior $82.99.
Netflix, the only profitable streaming service on the market, remains the sole platform that hasn't raised prices this year, choosing to focus on revenue initiatives like the crackdown on password sharing and its recently launched ad-supported tier instead.
On Tuesday, the company announced an executive shakeup within its advertising unit with Jeremi Gorman, who helped build the ad business from scratch, exiting the company after just over a year in the job. Amy Reinhard, who previously served as VP of studio operations, will succeed Gorman as the new president of advertising.
Netflix also announced Eunice Kim will be promoted to chief product officer while Elizabeth Stone will serve as chief technology officer.
The leadership changes come as Netflix revamps the company for its next stage of growth with pricing top of mind amid the competitive landscape.
The company last hiked prices in early 2022, bumping its Standard plan to $15.49 from $13.99 and increasing the cost of its Premium plan to $19.99 from $17.99. However, Netflix did quietly remove its "Basic" $9.99 plan in July — a bid to lure more users to its cheaper, $6.99 ad-based offering.
Added up, the cost of these services now rival the dreaded cable TV bundle of years past — the very thing that streaming set out to undo.
Consumers are taking notice with subscribers canceling more of their plans to combat rising costs.
Subscriber numbers at major direct-to-consumer services (DTC) including Peacock, Disney+, Hulu, ESPN+, Paramount+, Max, and Discovery+ were down by about 500,000 combined following this latest earnings season.
Despite the overall slowdown, growth was aided by Netflix's password sharing crackdown, which helped the streamer add 5.9 million subscribers in the second quarter with more users signing up for their own plans. Wider crackdowns on password sharing will likely become the norm as media giants prioritize profitability over subscriber count.
Disney said it would be implementing its own crackdown at some point in 2024.