American Netflix subscribers with standard and premium plans can expect to pay extra for the hugely popular streaming service in November, as reported by CNN Business. New subscribers have already been impacted by the price hike, whereas longtime Netflix users will allegedly be sufficiently notified before the boosted rate takes full effect, CNN Business reports.
This is not the first price increase Netflix has instituted in the past few years. The new prices are inflated versions of the figures resulting from a 2019 mark up, according to The Verge. The basic Netflix plan will maintain its going rate of $9 a month, featuring standard-definition audio and video and a single-screen stream cap, according to the official website’s Help Center. This rate was established in January 2019, as reported by The Verge. A standard plan, meanwhile, is now $14 a month, one dollar more than it was after changes made in 2019. Netflix’s standard plan guarantees high-definition audio and video, and adds another screen to the user’s simultaneous stream setup. Premium subscribers who previously paid $16 a month in 2019 for Ultra HD video and four-screen streaming capabilities will now have to pay $18 a month, CNN Business reports. Prior to 2019, the plan had a monthly rate of $14.
While these changes will influence the streaming giant’s American subscriber base, they allegedly do not signal a global price modification, The Verge reports. Netflix’s international audience has been able to provide the streamer with a steady revenue stream in recent years. In Q4 of 2019, Netflix made more from their combined sales in Latin America, Europe, the Middle East, Africa, and Asian countries than they did in the United States and Canada, as reported by Vox. Furthermore, international markets are reportedly where a majority share of the company’s tax payments are allocated, according to CBS MoneyWatch. At the end of 2018, Netflix claimed that their estimated annual worldwide income tax rate after deductions was 1%, in comparison with the expected federal corporate return rate of 21%, according to the 10-K Netflix filed with the SEC. The company addresses the discrepancy in their 2018 report, citing, among other things, “foreign taxes, non-deductible expenses and the international provisions from the U.S. tax reform.” Foreign tax credit carryovers feature heavily in Netflix’s 10-K report from 2019 as well, especially in regard to claims about the company’s estimated value. “The valuation allowance of $135 million was primarily related to foreign tax credits,” the report states.
Netflix co-CEO Ted Sarandos spoke to The Television Academy Foundation in 2019 about Netflix’s status as a multinational streaming property, and how a global presence was crucial to advancing the company beyond its origin in domestic DVD sales: “We never really became international on [sic] a DVD business, and streaming… [was perceived as] very global.” Sarandos was also able to give a sense of the company’s overall reach: “You can stream Netflix in one hundred ninety countries. Everywhere except China, North Korea, and Syria.”