Netflix Press Conference Story
On Thursday in Carroll Hall, Netflix CEO Ted Sarandos announced that as of Jan. 1, 2024, Netflix will be moving to a single pricing tier, limiting each subscription to one user for $49.99 monthly.
“We have abandoned our ad-free structure,” Sarandos said.
Netflix has three pricing tiers, starting from $6.99 per month. So, this astronomical increase in price might narrow Netflix’s target audience and significantly decrease subscriptions and revenues. Sarandos is not concerned about a potential drop in subscriptions despite the more cost-effective options in the marketplace, such as Prime Video. This is because he doubts customers will find better quality of entertainment due to Netflix’s exclusive content agreement with Jordan Peele and their investment in a Stranger Things theme park based in Florida.
In 2010, Netflix said, “love is sharing a password.” Despite how contradictory this statement might now appear, Sarandos said that their values have not changed, but “the financial reality of the business has changed.” The entertainment industry has lost an excess of $5 billion through the course of the writers’ strike. Having already had high costs, Sarandos believes that by shifting more of the financial burden to customers, they can maintain the business’s health and quality of customer experience.
“Quality content costs money,” Sarandos said. “The investments that we made in the programming are intentional. They are necessary to delivering a superior entertainment product.”
Additionally, Sarandos said that Netflix has made mistakes in the past. “I don’t think our compensation practices, our royalty practices, our loyalty to our writers and to our actors has been equitable and it’s not right.” He believes that by moving to the new pricing tier, Netflix will be able to increase the quality of their content because writers will be dignified with the salary they deserve. Sarandos hopes customers empathize with the writers simply trying to make a decent living.
Sarandos closed out his press conference by saying he remains confident that customers will remain loyal to Netflix. “We hope this is a start to a new dawn of content,
entertainment, and cooperation in the entertainment business,” he said.