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Is It Time For An Annual Netflix Plan? How Much Would It Cost?

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This year has been a busy year for Netflix so far. After announcing the end of its DVD delivery service and making changes to how household subscriptions are defined, the popular streaming service removed its Basic plan in the US, following a similar change in Canada last month.

As a result, and even though Netflix’s $6.99 a month Standard with ads plan helps to keep the entry cost low, the cheapest ad-free plan now costs $15.49 a month, making it one of the most expensive around.

In reality, Netflix making changes to its plans and prices is not something out of the ordinary. This year alone, CuriosityStream, DirecTV Stream, Fubo, HBO Max (now Max), Paramount Plus, Peacock, Starz, Vidgo, and YouTube TV have all already increased prices.

For some, a price increase has actually started to develop into an annual tradition, which would seem to suggest that the cost of streaming is only going to continue increasing as time goes on.

Annual plans help to save money

Most streaming services do offer additional ways to help save on the cost, with annual plans a prime example. Even though these yearly subscriptions cost more up front, they do tend to offer good savings overall, and especially for those that know they will remain subscribed for the full year.

When it comes to Netflix, the streaming service doesn’t offer any annual plan options at present, preferring new and existing subscribers to pay the full price each and every month. However, with the way things are going, that seems unlikely to continue to be a viable long-term solution.

In the past, Netflix repeatedly made clear that ads weren’t on the agenda, and yet that stance quickly changed. More to the point, ads appear to be a good solution for Netflix. At the most recent count, Netflix had almost five million Standard with ads subscribers.

Considering Netflix’s change of heart on ads, and the early signs of success for that shift in strategy, it’s not unreasonable to suggest that the company might also be considering whether it is worth offering yearly subscriptions as well.

How much would an annual Netflix plan cost?

Ultimately, whether or not an annual Netflix plan would be worth it depends on the price. While we can’t know for sure how much Netflix would charge on an annual basis, other services do provide a very good frame of reference.

Almost all streaming services that offer an annual plan tend to base the discount on the same rule where someone signs up for 12 months and only pays for 10 of those months. Basically, most annual plans tend to result in subscribers getting two months of service for free each year.

If we were to use this same formula to speculate on the cost of Netflix, here’s how much its annual plans would cost.

Netflix planMonthly
Cost
Potential annual
plan cost
Potential yearly
saving
Standard with ads$6.99$69.99$13.98
Standard$15.49$154.99$30.98
Premium$19.99$199.99$39.98

Based on these prices, the Standard with ads plan would cost around $5.83 on average. For those preferring an ad-free viewing experience, the Standard plan would cost around $12.92 a month on average, and the Premium plan would cost around $16.66 a month on average.

Even if Netflix only offered an annual plan for its most expensive subscription, it could still prove to be a good motivator for homes to upgrade. For example, by committing to (and paying for) a year up front, subscribers would gain 4K and spatial audio support for around $1 more than monthly Standard subscribers currently pay. This is in addition to the ability to download and/or watch on more devices at the same time.

So is it time for Netflix to introduce an annual plan?

Should Netflix now start considering an annual plan? The short answer is probably, yes. Not only are there obvious benefits for subscribers, like a cheaper yearly cost, but annual plans also tend to be beneficial to streaming services. For example, ensuring someone remains subscribed for the next twelve months without having to worry about them suddenly canceling.

Whether or not Netflix feels the same way is a different matter entirely. Right now, the company appears to be far more focused on building out its ad-supported business and making sure password-sharers pay for their own subscriptions. With this in mind, it seems unlikely that annual subscriptions are high up on Netflix’s agenda right now.

In reality, and as long as Netflix’s subscriber base continues to grow, we probably wouldn’t expect the company to introduce any new measures that actually lower the current cost.

John Finn

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