Netflix has been spending a whole lot of money on original productions, big-budget films, and massive marketing campaigns. A lot of those risks haven’t paid off, reputation-wise, but Netflix will shout to the heavens that they’re doing just fine number-wise (even though they won’t show you the numbers). Still, you gotta pay for all that stuff somehow. While Netflix has raised their subscription fees over the years, they haven’t played around too much with tiered subscriptions when it comes to online streaming.
Tiered subscriptions were a mainstay of the original Netflix model back when sending DVDs in the mail was their lone revenue generator. So it looks like the company is returning to its roots in a way with the announcement that the streaming service is considering adopting a high-end streaming plan for users.
Dubbed “Ultra,” the plan is currently being tested to see if customers would be willing to pay more for higher quality Ultra HD streaming.
The company is testing two versions of the plan, which goes for $16.99 a month. The first one offers four Ultra HD streams to a membership while the existing $13.99 Premium plan would offer two UHD streams. The second one would provide four concurrent Ultra HD streams to both Premium and Ultra consumers but only the Ultra plan owners would get access to high dynamic range (HDR) content, which allows for more vibrant color reproduction and higher contrast.
Netflix initially introduced the four-stream plan in 2013 but modified it a year later to make room for Ultra HD content. Clearly, they’re seeing some sort of benefit or interest because of its possible customers will want to up the ante even further for just a few extra bucks a month.
We may soon find out if there’s a limit to how much Netflix can charge without upsetting customers. The company raised the price of the two-stream HD tier from $9.99 to $10.99 per month in 2017 and the Premium Plan from $11.99 to $13.99 per month. Staying in that range doesn’t appear to have had a negative impact on their bottom line but once we start getting closer to the $20/month range, especially as consumers have to shell out monthly amounts for Hulu Plus, Amazon Prime, HBO, and so many other subscriptions, something’s gotta give somewhere.
Netflix certainly has the pop culture entertainment inventory to lead the pack now, but with Disney making moves and Amazon thinking bigger, Netflix may need to keep trying to innovate to justify these rising prices a few years from now.