Thursday, October 5, 2017

Netflix not hiking prices in South Africa

Netflix will not increase its prices in South Africa, a spokesperson told MyBroadband.

Mashable reported that Netflix will increase its subscription fees in the US from November.

As Netflix is priced in US dollars in South Africa, there was a concern this would lead to a local price hike.

A Netflix Standard subscription will increase from $9.99 to $10.99 in the US.

Netflix Premium, which includes UHD access, will increase from $11.99 to $13.99 in the US.

"From time to time, Netflix plans and pricing are adjusted as we add more exclusive TV shows and movies, introduce new product features, and improve the overall Netflix experience," said Netflix.

Price increase

Netflix's business is sensitive to price changes, and when the company announced an increase of $1 per month in 2015 for new customers in the US, Canada, and Latin America, its subscriber growth slowed to a three-year low.

In 2011, the company lost 800,000 US subscribers in one quarter after splitting its streaming and DVD services – effectively doubling the price for certain customers.

Part of the reason for the price increase is its original content spend. Netflix is spending $6 billion on programming this year, and will increase this to $7 billion next year.

While Netflix reports a profit every year, it lost $2.1 billion in free cash flow in the 12 months ending 30 June, reported Bloomberg.

Price comparison

The table below shows Netflix pricing in South Africa and the US, post increase.

Netflix PlanSA Price p/mUS Price p/mResolutionScreens
Basic$7.99$7.99SD1
Standard$9.99$10.99HD2
Premium$11.99$13.99HD / UHD4

Now read: What Netflix will get for its R1-million FPB licence fee

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