Netflix increases subscription by 83%, premium package now costs 7,000 naira

Video on-demand platform, Netflix, has effected a price increase on its subscription. This was revealed on the company’s website. This latest increase represents the second increase this year as it comes just three months after the last increase in April. According to the new subscription rates, Netflix Premium package has now increased by as much as 40 per cent, rising from 5,000 naira to 7,000 naira a month.

The lowest subscription package, the Netflix Mobile witnessed the highest increment rate, rising from 1,200 naira to 2,200 naira, an astounding 83 per cent increase. On the other hand, the Basic plan witnessed the lowest increment rate, rising from 2,900 naira to the new price of 3,500 naira, representing a 21 per cent increase.

The platform’s Standard subscription package witnessed a 37.5 per cent increase, rising from 4,000 naira to 5,500 naira. This plan is the most common plan for the Nigerian users as it offers HD quality and multi-screen viewing options.

As of the last increase in April, Premium package price rose from 4,400 naira to N5,000 naira, the Standard package went from 3,600 naira to 4,000 naira, but the Basic Plan was not increased, remaining at 2,900 naira.

Netflix said the price adjustment was part of a broader strategy to revise its subscription fees across various regions. According to the streaming giant, the adjustments were aimed at accelerating its revenue and earnings growth, following a pattern of periodic price hikes to support the expansion of content offerings.

Netflix price increase comes amid rising inflation

These price increments are coming in the wake of rising inflation which has seen Nigerians grapple with a cost of living crisis. Inflation stands at 34 percent while food inflation rate stands at nearly 41 per cent. With Nigerians struggling to afford their food and other basic necessities, they would surely struggle to afford luxuries such as the entertainment which Netflix provides.

But Netflix is not the only streaming company to have increased its subscription rates as it appears to be following in the footsteps of Multichoice. Multichoice has so far implemented a hike in rates three times in 2024. While all its increment were harshly criticized and even landed the company before a senate committee, business-wise, it was not hard to see that this was coming.

The company suffered a staggering after-tax loss of R911 million ($50.2 million), between April and September 2023. In reaction, the company effected a price hike across its African markets in December 2023. In January, the company announced a further hike, an increase which Chief Financial Officer (CFO), Tim Jacobs described as an “inflationary” one in an interview with Daily Investor.

Tim Jacobs revealed that the expected increase is due to mounting financial challenges as the company struggles to maintain a healthy balance sheet. According to him, inflation-level price increases for DStv are necessary to ensure sustainable growth and the continued delivery of high-quality content.

See also: DSTV/GoTV set for ‘inflationary’ price hike in 2024 amid financial pressure at Multichoice

The struggle to maintain a healthy balance sheet has led to three price increases over the course of the year for Multichoice. Netflix is still at two and the company appears to be working on other means of improving its earnings. One such means is an ad-supported subscription package known as the Basic with Ads. This package which offers a cheaper package for users who can’t cope with the ad-free packages, has been launched in various countries.

Nigeria is not the only country where the platform has increased its prices as adjustments have also been carried out in markets like the United States, United Kingdom, and France. While there is a likelihood that the platform would witness subscriber loss especially in crunching and inflation-stricken markets like Nigeria, perhaps launching the ad-supported packages would go a long way.