The refined residual era will bring higher consumer costs.
Hollywood is coming up on three months without an active production. SAG-AFTRA, the union that represents screen actors, went on strike on July 14th after failing to come to terms on a new deal with the Alliance of Motion Picture and Television Producers. Like the WGA strike that came before it, SAG-AFTRA is seeking a number of similar clauses in its next contract with AMPTP including defined protections from AI and transparent residuals from streaming projects.
Netflix has not raised its prices since January 2022. The service currently has three tiers: standard with ads for $6.99/month, standard for $15.49/month, and premium for $19.99/month. The most significant change within its pricing as of late has been setting limits on password sharing, as now Netflix offers a $7.99/month add-on for extra members.
Will Netflix Keep Its Content Volume?Netflix's intention to raise its prices indicates that the company is focused on making up for its imminent budget increases externally rather than internally. As evident by Warner Bros. Discovery's decision to archive Batgirl and Disney's cancellation of an already-finished Spiderwick Chronicles, studios have sought to save money by whittling down the amount of content that they put out.
All that is to say studios cannot continue to pump out the magnitude of projects in the refined residual era at their streaming services' current cheap costs. Only two of those three variables can be true, and for Netflix, it appears that they are willing to pivot subscription fees in order to maintain volume and comply with residuals.
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