Netflix UK Hikes Prices As Password Sharing Ban Triumphs

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Netflix, the American streaming giant, has announced another price hike for its UK subscribers, less than two years after the last major increase. 

Brace yourselves if you’re on Netflix’s Premium or Basic plans: The Premium (4K) tier is set to go up by £2 a month, while the Basic plan – which is no longer available to new subscribers but is still widely used by existing members – is also getting pricier.

However, Netflix’s most affordable plan, which includes adverts, won’t see any price changes. If you don’t mind sitting through a few ads, your subscription cost will remain the same for now.

It’s also worth noting that Netflix’s Basic plan is still being used on a lot of pay-TV bundles (from Sky and BT TV, for example) – so the current price increase may drag prices up on 3rd party bundles as well.

Netflix on smartphone

In addition to the pricing shake-up, we’ll also be diving into Netflix’s 2023 third-quarter results, which reveal some surprising insights.

From their ambitious content investments to their unexpectedly successful crackdown on password sharing

Netflix UK’s New Prices

The price hike, announced this week, comes amidst a backdrop of rising costs of living across the UK, making it a somewhat controversial move.

However, Netflix justifies this by pointing to its significant investments in content, including original series, films, and now even live sports events – the company spent over $17 billion on content last year.

The Crown netflix
The Crown (Photo: Netflix)

For the average UK consumer, the price increase means you’ll have to shell out a bit more each month if you’re on the Basic or Premium plans.

The Basic Plan (which is only available to existing subscribers who signed up before it was cancelled), sees a £1 increase to £7.99/m, while the Premium Plan goes up by £2 to a whopping £17.99/m. 

Therefore, after the change, Netflix will have these 4 pricing plans in the UK:

  • The Standard with Adverts Plan at £4.99/month – lets you stream content in Full HD (1080p), on 2 devices at a time, with adverts.
  • The Basic Plan at £7.99/month (only for legacy subscribers) – lets you stream content in HD (720p), on only one device at a time, without adverts
  • The Standard Plan at £10.99/month – lets you stream content in Full HD (1080p), on up to 2 devices at a time, without adverts.
  • The Premium Plan at £17.99/month – lets you stream some content in UltraHD (4K), on up to 4 devices at a time, without adverts.

If you’re on the Basic Plan, you’ll be paying an additional £12 annually, and if you’re on the Premium Plan, that’s an extra £24 each year (assuming you remain subscribed for 12 months, of course).

Netflix Plan and Pricing - without Basic
Netflix’s Plans (Without the Basic tier)

For new subscribers (of the Premium plan), prices have already gone up. For existing subscribers (on either the Premium or Basic plans) – users will be getting notifications from Netflix, detailing the exact date of the price increase (typically their next monthly billing date).

Netflix’s Content Investments

In its letter to investors, published this week as part of Netflix’s 2023 Q3 results, the company discussed its increasing content costs.

Netflix has been investing heavily in content, with over $17 billion spent last year. The platform has seen significant success with shows like Squid Game, Lupin, and Money Heist.

Squid Game Netflix
Squid Game (Photo: Netflix)

The Q3 2023 results indicate a 7.8% year-over-year growth in revenue, slightly above their forecast due to higher-than-expected member growth.

This growth was attributed to the roll-out of paid sharing (also known as the infamous password-sharing crackdown – see more on that below), strong programming, and the ongoing expansion of streaming globally.

In addition to series and films, Netflix is also venturing into live sports events. The company recently announced “The Netflix Cup,” their first-ever live sports event, featuring athletes from Formula 1: Drive to Survive and Full Swing, streaming live on November 14, 2023.

This diversification into sports content could be a strategic move to attract a broader audience and justify the price increases.

The Rise Of Ad-Supported Membership

Netflix’s ad-supported membership is a relatively new offering that allows users to access the platform’s extensive library of content but with adverts sprinkled throughout.

Initially launched in late 2022 as ‘Basic with Ads’, Netflix’s Ad-supported tier provided subscribers with access to the majority of Netflix’s content library, but with a slight twist.

For a reduced price of £4.99/month ($6.99 in the US), subscribers have to bear with several minutes of adverts per hour.

However, the ‘Basic with Ads’ tag didn’t stick around for long. In April 2023, Netflix announced a significant upgrade to this tier, enhancing the video quality from 720p to 1080p, and allowing for two simultaneous streams.

This major uplift essentially matched the offerings of the higher-priced ‘Standard’ tier, prompting Netflix to rebrand the plan from ‘Basic with Ads’ to ‘Standard with Ads’.

Then, in July 2023, Netflix cancelled its ad-free ‘Basic’ tier altogether (for new subscribers) – making the ‘Standard With Ads’ tier the only low-cost option to watch Netflix.

Since then, subscribers who wish to watch Netflix without adverts, have had to jump to the Standard tier, which costs £10.99/month. 

Netflix UK Plans October 2023

And now, with the price increase of the ‘Basic’ tier – from £6.99/month to £7.99/month – existing subscribers who are still on that plan will likely find it even harder to remain on that tier.

According to Netflix’s Q3 2023 results, the ad-supported membership has seen a nearly 70% increase quarter-over-quarter and now accounts for about 30% of all new sign-ups in the 12 countries where it’s available, including the UK.

This suggests that the British public has been quite receptive to this new offering, likely due to its lower price point and the quality of content still available through this plan.

Netflix’s Password Sharing Crackdown

Password sharing has been a common practice among Netflix users for years – with friends and family often sharing accounts to save on subscription costs.

Netflix password login phone

While Netflix has been somewhat lenient about this in the past, things have certainly changed this year. Last May, Netflix started to implement measures to curb password sharing.

If you’re found sharing your Netflix password outside your immediate living environment, you’ll receive an email warning you that continued sharing will incur additional charges.

Specifically, each “Extra Member” you add to your account will cost an extra £4.99 per month.

The number of extra members you can add depends on your subscription tier. For instance, if you’re on the Standard Plan, you can add one extra member, while Premium subscribers can add up to two.

The company has since taken action in every region, to convert what they now call “borrower households” into full-paying memberships. 

Netflix paid members live UK
Netflix’s Email About Password Sharing

According to the Q3 results, Netflix’s new measures have been successful in converting these “borrower households” into full-paying members, as the increase in global paid users year over year (%10.8) demonstrates – exceeding the company’s expectations. 

Netflix also says that while some users are cancelling their subscription to these new rules – “The cancel reaction continues to be low, exceeding our expectations.”

With Netflix’s success, it’s no wonder other companies are now eyeing a password-sharing crackdown as well.

Last month, Disney+ also changed its terms in the UK, and password sharing across multiple households is no longer allowed.

Is Netflix Getting Too Expensive?

The price increase comes at a time when Netflix is already one of the most expensive streaming services in the UK – unless you take the ad-supported tier into account.

Disney Plus and Netflix on phone
(Photo: Deposit Photos / Daniel Constante)

And while the ‘Premium’ plan might be considered, well, a premium tier – with competitors like Amazon’s Prime Video and Disney+ offering competitive prices and 4K streaming, Netflix’s new pricing strategy could be a double-edged sword.

It remains to be seen how UK subscribers will react to this change and whether the enhanced content offerings and new features will be enough to justify the higher costs.

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