Netflix Price Hike Explained as Streamer Eyes More Licensed Shows Following Suits Success

There are some more changes at Netflix, and yes, the streamer is asking subscribers to part with some more money.

Netflix announced Wednesday some changes to two of its most popular plans.

What Will Netflix Cost After New Price Rises?

The streaming service's most expensive plan, Premium, will increase from $19.99 to $22.99 monthly.

The primary, advertising-free plan will surge from $9.99 to $11.99 monthly.

Two of the four services offered by the home of Stranger Things will remain the same.

The standard plan with ads will remain at $6.99, while the ad-free equivalent will still set you back $15.49.

While we mostly paused price increases as we rolled out paid sharing, our overall approach remains the same — a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more," the company said in its third-quarter shareholder letter.

Netflix Adds a Lot of New Subscribers in the Year's Third Quarter

Netflix also announced Wednesday that it added nine million subscribers in the third quarter, which also helped contribute to year-over-year revenue.

The subscriber increase is interesting because the crackdown on password sharing and the rise of the cheaper ad-supported plan are paying off.

Netflix has reached 247 million subscribers worldwide, a surefire sign that things are moving in the right direction.

The Rise of Ad-Supported Streaming

Ad-supported tiers appear to be becoming more popular across streaming services as ad-free plans continue to increase in price.

The numbers also come from when there was a dual Hollywood strike, with both the WGA and SAG-AFTRA on strike.

The WGA strike has been resolved, but talks recently broke down between SAG-AFTRA and the AMPTP.

During an earnings call Wednesday, Ted Sarandos, the company's co-chairman, said that Netflix is "incredibly and totally committed to ending this strike."

However, he added that "a subscriber levy that is unrelated to viewing or success" asked for by SAG-AFTRA "really broke our momentum."

The Suits Effect

While it was expected that scripted originals on the streaming services would begin to be exhausted due to the strikes, one of Netflix's biggest hits of the year was an acquisition from NBCUniversal.

Yes, we're talking about Suits. The legal drama, starring Meghan Markle, spent 12 weeks at the top spot of the Nielsen streaming chart.

The series broke records and staged a rare renaissance four years after its finale.

It was so big on Netflix that NBCUniversal is now prepping a new entry in the franchise that is said to feature none of the original stars.

It will be comparable to a new NCIS or FBI entry in that it would be a new location with a new ensemble.

It's practically unheard of for a show to stage this kind of comeback in pop culture, but Netflix hopes that more licensed shows can pull off a similar trick.

In recent years, Netflix has been laser-focused on its original series, but Suits has seemingly made the company realize that other shows could reach that level of success.

"This legal drama originally premiered on USA Network in 2011 and ran until 2019," the company said in its results, according to Deadline.

"Despite having been available on other streaming services, the debut of seasons one to eight on Netflix in July broke viewing records," it noted.

"Licensing has always been an important part of our programming strategy," Netflix adds.

"As the competitive environment evolves, we may have increased opportunities to license more hit titles to complement our original programming.

We believe this will deliver additional value for our members (i.e., engagement), as well as for rights holders who benefit from the increased awareness and revenue that Netflix delivers, in addition to the new life that success on Netflix can drive."