Commentary: Why do we put up with Netflix's endless price hikes?
SINGAPORE: When Bengawan Solo raised the price of my favourite pandan cheese roll from S$1.70 (US$1.30) to S$2.70 per slice a few years ago, I declared to my family that I was boycotting the confectionery: 'I don't need these empty calories!'
When Netflix increased its premium tier pricing from S$25.98 to S$29.98 last week, I felt annoyed, then quickly consoled myself: 'It's just S$4 – less than what a bowl of noodles costs.' Never mind that Netflix content can be considered 'empty calories' too. Or that the company had just raised its prices last year, in February 2024.
Over the past decade, my monthly Netflix bill has gone up 77 per cent. When the streaming service first launched here in 2016, I paid S$16.98 for the premium tier. A basic subscription ran S$10.98 in 2016 and is now S$15.98, a 46 per cent increase.
Netflix's pricing behaviour is at odds with a world where people are cutting expenses in the face of tariffs and large-scale employment disruptions induced by artificial intelligence. Yet, the company appears confident that millions will swallow the latest price hike like I did.
Maybe they're right. After all, a Singapore Management University study in 2024 revealed that about 38 per cent of respondents now consider streaming services to be a 'basic essential so that a person can lead a normal life in Singapore'.
All the same, how much longer can Netflix keep raising prices without losing customers?
CONTENT IS KING
A combination of shrewd planning, massive spending, competitor missteps and lifestyle changes has made Netflix wildly successful and – more importantly – the clear winner of the streaming wars.
From October to December 2024, despite a wave of complaints about its rising prices and crackdowns on account sharing, Netflix added a record 18.9 million global subscribers. Its subscriber base numbers over 300 million today, far outstripping Amazon Prime (about 200 million), Disney (125 million), Max (117 million) and Apple TV (25 million).
Netflix keeps viewers captive by serving up a non-stop flow of varied, high-quality content. In 2025, the company plans to spend US$18 billion on content, up from US$16 billion in 2024.
In the next few months, subscribers will get to watch the final seasons of hit shows Stranger Things, Squid Game and the second season of Addams Family spinoff Wednesday. I'm not a fan of these, but I just binge-watched the new season of Black Mirror, and am eagerly awaiting the return of Love, Death And Robots.
Thanks to the massive amount of viewership data feeding its algorithms, Netflix has become a pro at pandering to a wide range of tastes. Even viewers hankering for local fare have more than just Emerald Hill to satisfy them in its growing Southeast Asian catalogue.
Netflix chief financial officer Spencer Neumann in March said that 'we're not anywhere near a ceiling' in terms of content spend. The streamer is in about 40 per cent of connected TV households but has only captured 6 per cent of the addressable market, he shared.
This explains why, starting this year, subscribers are seeing John Cena and other World Wrestling Entertainment stars appearing on Netflix in a US$5 billion deal. I haven't watched Wrestlemania in over 30 years – but since I've technically already paid for it, why not?
WHAT IS VALUE?
Meanwhile, Netflix's competitors are struggling to justify their value to consumers.
In late 2024, Disney+ increased its subscription prices and lost over 700,000 global subscribers in the same quarter – myself included. In Singapore, the cost of its standard monthly subscription went up from S$12.98 to S$15.98, and the premium tier went from S$15.98 to S$18.98.
Why did I cancel my subscription? Compared to Netflix, Disney+ seemed to offer little new content, flogging the tired Star Wars and Marvel catalogue on repeat. I now subscribe to Disney+ on an ad-hoc basis to binge-watch select series such as Daredevil: Born Again, or whenever I get a good offer. For example, I recently recontracted my Singtel mobile line, a deal that came with six free months of Disney+.
HBO used to be the king of cable TV with blockbuster hits like Game of Thrones and Westworld, but its rocky rebranding as Max has confused viewers. Perhaps current hits The White Lotus and The Last of Us can convince some to pay S$14.48 a month – but that's not a lot of options to bank on.
I keep paying for Amazon Prime Video simply because it's a no-brainer at S$4.99 a month. Its catalogue may be spotty in quality, ranging from stellar offerings like The Expanse, to a weak prequel series to The Lord of The Rings and forgotten 1980s B-movies – but the non-streaming perks make up for it, including free shipping on Amazon Prime Singapore and free PC games each month.
But this is something Netflix is also making moves on: Just download the Netflix mobile app and you can install games featuring famous IP such as Street Fighter, Sonic the Hedgehog, Grand Theft Auto and Squid Game.
CINEMAS CANNOT FIGHT BACK
Also helping Netflix to win the long game is the stubborn refusal of cinema operators to change with the times.
I used to love the cinema – I brought my family to watch every Marvel superhero movie until Avengers: Endgame in 2019. But while ticket prices kept going up (now costing about S$15 for a weekend ticket), the actual experience only seemed to be getting worse.
For instance, the last few movies I watched at Golden Village Bishan were marred by blurry projection, poor colour definition or deafeningly loud audio. (Recent Google reviews reflect similar experiences from other patrons.)
When the same movies were released on streaming, I watched them again at home and found each time to be a much better viewing experience, thanks to the excellent colour reproduction of my 4K OLED television – a feature shared by most TVs sold today. I could also adjust the volume as needed.
Even if the movie isn't available on Netflix, it's much better value to me to rent the 4K versions for about S$5 off the Apple TV Store. I don't have to sit through up to 20 minutes of inane ads; nor do I have to endure stuffy or freezing temperatures. (And I can press pause when I need to run to the bathroom!)
A good cinema can still offer an immersive viewing experience, but nowadays, the home experience isn't that shabby. Thus, I'm not surprised that cinema attendance has yet to return to pre-COVID levels; nor did I shed a tear when mm2 shuttered more Cathay cinemas.
CAN NETFLIX BE STOPPED?
As long as consumers continue to demonstrate a willingness to spend on digital entertainment even during periods of economic uncertainty, Netflix – and its price hikes – seems likely to remain unstoppable for now.
In truth, the company's biggest competitor is not Disney+ or Amazon, but YouTube, which is just slightly behind Netflix in audience size (270 million paying subscribers versus Netflix's 300 million) and boasts similar revenue (about US$10 billion in the last quarter of 2024).
YouTube's advantage is that it's driven by user-generated content; it doesn't need to invest in original content production like Netflix. I already watch YouTube more than Netflix, tolerating the annoying ads to avoid paying the S$13.98 subscription fee.
More lightweight fare on TikTok and Instagram appeals to shorter attention spans. For gamers, there's no shortage of cheap mobile games and affordable PC gaming subscription services like Microsoft's Game Pass (S$11.99 a month) to satisfy one's entertainment needs.
So should Netflix breach the S$30 barrier for its premium tier, I do have alternatives ready.
Unfortunately, even with all these much cheaper options, Netflix's grip on me may still remain iron-clad – simply for the fact that before I can cancel my subscription, I'll first need to survive negotiations with my wife and children.
Fine. You win, Netflix. Again.
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