Netflix is increasing the prices of some of its subscription plans, despite its recent success in cracking down on password sharing. The streaming giant announced that the monthly charges for its basic service in the UK will rise by £1 to £7.99, while the premium option will increase by £2 to £17.99. This reflects Netflix’s growing confidence, as it added 8.8 million subscribers from July to September, the most in over two years. In the US, the premium plan will cost $3 more per month at $22.99, and in France, premium subscribers will pay an extra €2 at €19.99.

Netflix has been facing doubts about its ability to attract new members due to increasing competition, rising prices, and delays in new releases caused by a Hollywood strike. However, the company’s recent subscriber growth was driven by its decision to charge an extra fee for multiple households on the same account. Additionally, the launch of a cheaper plan with advertisements accounted for about 30% of sign-ups in countries where it was available.

Netflix believes that its library, which includes a mix of original hits and licensed fan favorites, will continue to attract audiences. The company has been emphasizing its own productions in recent years but acknowledges the importance of licensing as the competitive environment evolves. Analysts predict that licensed material will become even more important as the Hollywood strikes have halted new productions for several months.

Netflix’s strong financial position sets it apart from its rivals in the streaming business, as it reported a 7.8% increase in quarterly revenue and $1.67 billion in profits. The company has been trying to encourage customers to switch to the advertising-funded plan, which it sees as having the potential to drive profits. This is one of the reasons for the price hike on its basic plan, which is no longer widely promoted on its website.

Analysts expect Netflix to continue raising prices in the future to protect its profits and cover costs from licensing and new initiatives. The company recently announced plans to open physical destinations for shopping, dining, and Netflix “experiences.” Paolo Pescatore, an analyst at PP Foresight, believes that price increases will likely occur annually, similar to traditional pay TV and other services. Following the announcement, Netflix shares jumped more than 10% in after-hours trade.

Original news source: Netflix raises prices despite password crackdown success (BBC)

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Group or Classroom Activities

Warm-up Activities:

– News Summary
Instructions: Have students read the article individually or in pairs. Then, ask them to write a summary of the article in their own words. Encourage them to include the main points and key details. After they have finished, have a class discussion to compare and discuss their summaries.

– Opinion Poll
Instructions: Divide the class into pairs or small groups. Ask each group to come up with three questions related to the article that they can use to conduct an opinion poll. For example, “Do you think Netflix’s price increase is justified?” or “Would you be willing to switch to the advertising-funded plan?” Once they have their questions, have each group go around and interview other groups or individuals in the class. Afterward, have a class discussion to share and compare the results.

– Vocabulary Pictionary
Instructions: Choose 10 key vocabulary words from the article and write them on the board. Divide the class into two teams. One student from each team will come to the board and choose a word. They must then draw a picture to represent the word while their team tries to guess it. The team that guesses correctly gets a point. Repeat with different students and words until all the vocabulary words have been used. The team with the most points at the end wins.

– Pros and Cons
Instructions: Divide the class into two groups. Assign one group to come up with the pros of Netflix increasing its prices, and assign the other group to come up with the cons. Give them some time to brainstorm and discuss within their groups. Then, bring the class back together and have each group present their arguments. Encourage the class to engage in a respectful debate and discuss the different perspectives on the issue.

– Future Predictions
Instructions: Ask students to imagine they are Netflix executives and have to make predictions about the future of the company. In small groups, have them discuss and write down their predictions for the next 5-10 years. They should consider factors such as competition, technology, and consumer trends. Afterward, have each group present their predictions to the class and discuss the likelihood and potential impact of each scenario.

Comprehension Questions:

1. Why is Netflix increasing the prices of some of its subscription plans?
2. How many subscribers did Netflix add from July to September?
3. What was the reason for Netflix’s recent subscriber growth?
4. What percentage of sign-ups were accounted for by the launch of a cheaper plan with advertisements?
5. How does Netflix view its library of content?
6. Why is licensed material becoming more important for Netflix?
7. What sets Netflix apart from its rivals in the streaming business?
8. What are analysts predicting for the future of Netflix’s prices?
Go to answers ⇩

Listen and Fill in the Gaps:

Netflix is increasing the (1)______ of some of its subscription plans, despite its recent success in cracking down on password sharing. The streaming giant announced that the monthly charges for its basic service in the UK will rise by £1 to £7.99, while the (2)______ (3)______ will increase by £2 to £17.99. This reflects Netflix’s growing confidence, as it added 8.8 million subscribers from July to September, the most in over two years. In the US, the premium plan will cost $3 more per month at $22.99, and in France, premium subscribers will pay an (4)______ €2 at €19.99.

Netflix has been facing doubts about its ability to attract new members due to increasing competition, rising prices, and delays in new releases caused by a (5)______ strike. However, the company’s recent subscriber growth was driven by its decision to charge an extra fee for (6)______ households on the same account. Additionally, the launch of a cheaper plan with advertisements accounted for about 30% of sign-ups in countries where it was available.

Netflix believes that its library, which includes a mix of original hits and licensed fan favorites, will continue to attract (7)______. The company has been (8)______ its own (9)______ in recent years but acknowledges the importance of licensing as the competitive (10)______ evolves. Analysts predict that (11)______ material will become even more important as the Hollywood strikes have (12)______ new productions for several months.

Netflix’s strong financial position sets it apart from its rivals in the streaming business, as it reported a 7.8% increase in quarterly revenue and $1.67 billion in profits. The company has been trying to encourage customers to switch to the advertising-funded plan, which it sees as having the potential to drive profits. This is one of the reasons for the price hike on its basic plan, which is no longer widely promoted on its website.

Analysts expect Netflix to continue raising prices in the future to (13)______ its profits and cover costs from licensing and new (14)______. The company recently announced plans to open physical destinations for shopping, dining, and Netflix “experiences.” (15)______ Pescatore, an analyst at PP Foresight, believes that price increases will likely occur annually, similar to traditional pay TV and other services. Following the announcement, Netflix (16)______ jumped more than 10% in after-hours trade.
Go to answers ⇩

Discussion Questions:

Students can ask a partner these questions, or discuss them as a group.

1. What is your opinion on Netflix increasing its subscription prices?
2. How would you feel if Netflix started including advertisements in its streaming service?
3. Do you think the price increase will affect Netflix’s ability to attract new members? Why or why not?
4. Have you ever shared your Netflix password with someone else? Why or why not?
5. Do you think Netflix’s library of original hits and licensed favorites is enough to keep attracting audiences? Why or why not?
6. How do you think the Hollywood strike will impact Netflix’s ability to release new content?
7. What do you think about Netflix’s decision to open physical destinations for shopping, dining, and “experiences”?
8. Do you think it’s fair for Netflix to charge an extra fee for multiple households sharing the same account? Why or why not?
9. How do you think the price increase will affect Netflix’s competition in the streaming business?
10. What other streaming services do you use besides Netflix? Why do you choose to use those services?
11. How important is licensing for Netflix’s success? Why or why not?
12. Would you be willing to pay more for a premium subscription plan on Netflix? Why or why not?
13. How do you think the price increase will impact Netflix’s profits?
14. What do you think about the idea of Netflix offering a cheaper plan with advertisements?
15. Do you think Netflix’s strategy of emphasizing its own productions is effective in attracting audiences? Why or why not?

Individual Activities

Vocabulary Meanings:

Match each word to its meaning.

Words:
1. Netflix
2. prices
3. subscription
4. success
5. cracking
6. password
7. sharing
8. plans

Meanings:
(a) The amount of money charged for something
(b) The strategies or arrangements for the future
(c) The act of breaking into something
(d) A secret code used to access an account
(e) The state of achieving a desired outcome
(f) The act of paying regularly to access a service
(g) The company that is increasing prices
(h) The act of giving access to others
Go to answers ⇩

Multiple Choice Questions:

1. What is the reason behind Netflix’s decision to increase its subscription prices?
(a) Decreasing competition and rising profits
(b) Growing confidence and success in cracking down on password sharing
(c) Hollywood strikes and delays in new releases
(d) Declining subscriber growth and financial instability

2. How much will the premium plan in the UK cost after the price increase?
(a) £9.99
(b) £7.99
(c) £17.99
(d) £19.99

3. What percentage of sign-ups in countries with the cheaper plan were accounted for by the launch of the cheaper plan with advertisements?
(a) 30%
(b) 10%
(c) 50%
(d) 70%

4. What does Netflix believe will continue to attract audiences?
(a) Its competitive pricing and customer service
(b) Its library of original hits and licensed fan favorites
(c) Its physical destinations for shopping and dining
(d) Its focus on advertising-funded plans

5. How does Netflix’s financial position compare to its rivals in the streaming business?
(a) It is weaker, with declining profits and revenue
(b) It is similar, with stable profits and revenue
(c) It is uncertain, as Netflix’s financial position is not disclosed
(d) It is stronger, with an increase in quarterly revenue and profits

6. What is one of the reasons for the price hike on Netflix’s basic plan?
(a) To attract new members and increase subscriber growth
(b) To cover costs from licensing and new initiatives
(c) To encourage customers to switch to the advertising-funded plan
(d) To compete with other streaming services in the market

7. How often do analysts predict that Netflix will raise its prices in the future?
(a) Quarterly, to keep up with changing market conditions
(b) Monthly, to maximize profits and cover costs
(c) Irregularly, depending on subscriber growth and financial performance
(d) Annually, similar to traditional pay TV and other services

8. What was the market response to Netflix’s announcement of price increases?
(a) Netflix shares jumped more than 10% in after-hours trade
(b) Netflix shares declined by 10% in after-hours trade
(c) The market response was neutral, with no significant change in Netflix shares
(d) The market response is yet to be determined

Go to answers ⇩

True or False Questions:

1. Netflix is not increasing the prices of any of its subscription plans.
2. In the US, the premium plan will cost $3 more per month at $22.99.
3. In France, premium subscribers will not pay an extra €2 at €19.99.
4. Netflix did not add 8.8 million subscribers from July to September, the most in over two years.
5. The monthly charges for Netflix’s basic service in the UK will rise by £1 to £7.99.
6. Netflix reported a 7.8% increase in quarterly revenue and $1.67 billion in profits.
7. The premium option in the UK will increase by £2 to £17.99.
8. Netflix’s recent subscriber growth was not driven by its decision to charge an extra fee for multiple households on the same account.
Go to answers ⇩

Write a Summary:

Write a summary of this news article in two sentences.

Writing Questions:

Answer the following questions. Write as much as you can for each answer.

1. Why is Netflix increasing the prices of some of its subscription plans?
2. How has Netflix been able to attract new subscribers despite doubts about its ability to do so?
3. What is Netflix’s strategy for attracting audiences to its library?
4. How does Netflix’s financial position compare to its rivals in the streaming business?
5. What are analysts’ predictions for Netflix’s future pricing strategy?

Answers

Comprehension Question Answers:

1. Netflix is increasing the prices of some of its subscription plans to protect its profits and cover costs from licensing and new initiatives.
2. Netflix added 8.8 million subscribers from July to September.
3. Netflix’s recent subscriber growth was driven by its decision to charge an extra fee for multiple households on the same account, as well as the launch of a cheaper plan with advertisements.
4. The launch of a cheaper plan with advertisements accounted for about 30% of sign-ups in countries where it was available.
5. Netflix views its library of content as a mix of original hits and licensed fan favorites that will continue to attract audiences.
6. Licensed material is becoming more important for Netflix as the Hollywood strikes have halted new productions for several months.
7. Netflix’s strong financial position, with a 7.8% increase in quarterly revenue and $1.67 billion in profits, sets it apart from its rivals in the streaming business.
8. Analysts predict that Netflix will continue raising prices in the future to protect its profits and cover costs from licensing and new initiatives, similar to traditional pay TV and other services.
Go back to questions ⇧

Listen and Fill in the Gaps Answers:

(1) prices
(2) premium
(3) option
(4) extra
(5) Hollywood
(6) multiple
(7) audiences
(8) emphasizing
(9) productions
(10) environment
(11) licensed
(12) halted
(13) protect
(14) initiatives
(15) Paolo
(16) shares
Go back to questions ⇧

Vocabulary Meanings Answers:

1. Netflix
Answer: (g) The company that is increasing prices

2. prices
Answer: (a) The amount of money charged for something

3. subscription
Answer: (f) The act of paying regularly to access a service

4. success
Answer: (e) The state of achieving a desired outcome

5. cracking
Answer: (c) The act of breaking into something

6. password
Answer: (d) A secret code used to access an account

7. sharing
Answer: (h) The act of giving access to others

8. plans
Answer: (b) The strategies or arrangements for the future
Go back to questions ⇧

Multiple Choice Answers:

1. What is the reason behind Netflix’s decision to increase its subscription prices?
Answer: (b) Growing confidence and success in cracking down on password sharing

2. How much will the premium plan in the UK cost after the price increase?
Answer: (c) £17.99

3. What percentage of sign-ups in countries with the cheaper plan were accounted for by the launch of the cheaper plan with advertisements?
Answer: (a) 30%

4. What does Netflix believe will continue to attract audiences?
Answer: (b) Its library of original hits and licensed fan favorites

5. How does Netflix’s financial position compare to its rivals in the streaming business?
Answer: (d) It is stronger, with an increase in quarterly revenue and profits

6. What is one of the reasons for the price hike on Netflix’s basic plan?
Answer: (c) To encourage customers to switch to the advertising-funded plan

7. How often do analysts predict that Netflix will raise its prices in the future?
Answer: (d) Annually, similar to traditional pay TV and other services

8. What was the market response to Netflix’s announcement of price increases?
Answer: (a) Netflix shares jumped more than 10% in after-hours trade
Go back to questions ⇧

True or False Answers:

1. Netflix is not increasing the prices of any of its subscription plans. (Answer: False)
2. In the US, the premium plan will cost $3 more per month at $22.99. (Answer: True)
3. In France, premium subscribers will not pay an extra €2 at €19.99. (Answer: False)
4. Netflix did not add 8.8 million subscribers from July to September, the most in over two years. (Answer: False)
5. The monthly charges for Netflix’s basic service in the UK will rise by £1 to £7.99. (Answer: True)
6. Netflix reported a 7.8% increase in quarterly revenue and $1.67 billion in profits. (Answer: True)
7. The premium option in the UK will increase by £2 to £17.99. (Answer: True)
8. Netflix’s recent subscriber growth was not driven by its decision to charge an extra fee for multiple households on the same account. (Answer: False)
Go back to questions ⇧