According to media reports, earlier this year, a new Digital Service tax law was signed which has led to streaming service giant, Netflix, increasing its Premium Plan pricing. The increase does not come as a surprise as the implementation of the digital service tax was expected to affect pricing and subscriptions of digital services.
However, Netflix users had remained hopeful considering that Netflix rival Showmax had recently reduced its mobile streaming subscription price to KES300 (US$2,77) while Amazon Prime Videos only charges US$5.99. Although the two competitor platforms are relatively not as popular as Netflix, it can be argued that the increase in subscription pricing on Netflix services will assist in driving subscription numbers to the two platforms.
Currently, the charges on the platform are as follows:
– The Basic Plan had decreased from KES 806 (US$7,45) to KES 700 (US$ 6,47)
– The Standard Plan had also been reduced from KES 1000 (US$ 9,24) to KES 950 (US$ 8,78)
– The Premium Plan was KES 1209 (US$ 11,17) and now costs KES 1200 (US$11,09)
Due to the digital service tax, the pricing will now increase to:
– The Standard Plan will now cost KES 1100 (US$ 10,17)
– The Premium Plan will rise to KES 1450 (US$ 13,40)
It is highly probable that Netflix will experience a decrease in Premium users due to the increase. However, it is expected that the Basic Plan and the Standard Plan will see an increase in subscriptions.