In early 2025, both Netflix and Spotify announced new subscription price increases that are already affecting millions of customers. Netflix raised the cost of its ad-free Standard and Premium plans in the United States, explaining that higher rates are needed to keep funding original programming while also covering the rising costs of production and operations. For years, streaming companies relied on low monthly prices to pull customers away from cable, but now that many households consider these services essential, providers see more room to push rates higher without losing too many subscribers.
Spotify followed a similar path, expanding Premium price increases across much of Europe, Africa, and Latin America, moving the monthly cost from €10.99 to €11.99. These changes show the financial pressure facing major platforms and how dependent they are on customer loyalty to absorb additional costs. It also raises a bigger question about demand: how much longer will people accept paying higher prices before deciding that the cost no longer matches the value of what they’re getting?
Spotify followed a similar path, expanding Premium price increases across much of Europe, Africa, and Latin America, moving the monthly cost from €10.99 to €11.99. These changes show the financial pressure facing major platforms and how dependent they are on customer loyalty to absorb additional costs. It also raises a bigger question about demand: how much longer will people accept paying higher prices before deciding that the cost no longer matches the value of what they’re getting?
Sources:
https://www.theverge.com/2025/1/21/24348682/netflix-price-increase-earnings-q4-2024
https://www.barrons.com/articles/spotify-stock-prices-wall-street-213d4480
https://www.theverge.com/2025/1/21/24348682/netflix-price-increase-earnings-q4-2024
https://www.barrons.com/articles/spotify-stock-prices-wall-street-213d4480
5 comments:
You raise an interesting point about when a non-essential good becomes too expensive for the average household to be able to afford. The popularity of having thousands of shows and movies easily accessible has only increased in demand and doesn't look to be slowing down anytime soon. Netflix recently updated its policy to be a one-household policy by using your home's Wi-Fi to deter multiple families from using one account. This new policy change could be the reason for the larger demand for streaming services.
I think it's interesting to think about how much longer customers will tolerate these increases in prices. In my opinion it feels like Netflix and Spotify are taking advantage of the fact that people see them as essential. Streaming was supposed to be the affordable alternative to cable, but now it feels like it's becoming just as expensive as cable. Especially if you subscribe to multiple streaming services that each increase their prices.
I’m not a fan of this news, as I’m subscribed to both services. It will be interesting to see how consumers respond and whether they’ll consider more affordable alternatives in the long run. I’m also curious to see how Netflix and Spotify will react to this shift.
This is a very interesting topic for me because my family has had a Netflix subscription for years and all I hear about it is how it keeps going up. I understand that inflation could have an affect on this as well but do not think raising their plans a dollars worth the backlash they are receiving.
I hate to see these price increases, but I agree these are essential platforms that will profit from these decisions. I hope that these prices don't continue to increase out of my price range.
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