Top technology firms such as Netflix, Google, DSTV, GOtv, and Microsoft have raised their Nigeria’s subscription prices due to the galloping inflation in the economy.
Gaming apps are not left out, with the naira value dropping from N768.16/$ on July 20, 2023 to N1609.29/$ on July 26, 2024 in the official market.
These price increases are due to the various economic challenges impacting business operations. Record-high inflation, reaching 34.19 percent in June 2024, and the naira’s devaluation have forced many companies to adjust prices.
This decline in the naira’s value has exacerbated the operating environment for businesses while eroding Nigerians’ purchasing power.
Read also: Inflation is slowing among top African economies but not in Nigeria
Netflix is the most recent digital service provider to raise prices twice in less than six months.
In April, Netflix raised its premium plan from N4,400 ($2.76) to N5,000 ($3.14). Its standard plan went from N3,600 ($2.26) to N4,000 ($2.51), and the mobile plan rose to N1,600 ($1.01) from N1,200 ($0.75). The price review didn’t affect the basic plan, which remained at N2,900 ($1.82).
The streaming platform has now implemented a new range of price increases. According to its website, the premium plan now costs N7,000 ($4.40), up from N5,000 ($3.14). The standard plan has also increased from N4,000 ($2.51) to N5,500 ($3.46). The mobile plan now costs N2,200 ($1.38), while the basic plan is now priced at N3,500 ($2.20).
Netflix’s lower price band has increased by 83.33 percent, and its higher price band has jumped by 59.09 percent in less than six months.
“Seven thousand naira monthly is a lot. They just increased it to 5,000 not too long ago. How many subscriptions does a person want to pay? We are going through a lot,” Okeoghene, @terhso, tweeted.
Edward Israel-Ayide added, “As content becomes more expensive to consume, users will seek alternatives. In a country where content piracy is mainstream, these alternatives will most likely be illegal download and streaming sites.”
Nigerians are consuming more content on the internet. Monthly internet usage has grown by 501.99 percent since 2019. This surge has been fueled by the growing appetite for streaming services and other online activities, accessible primarily through smartphones.
“We offer a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more. Starting on 22 July, we’re adjusting prices in Nigeria with plans starting at N2,200,” a Netflix spokesperson told BusinessDay.
Read also: Monetary policy jumps 50 basis points: CBN’s bold move amid stubborn inflation
While the company didn’t explicitly mention currency fluctuations, it explained during the prior price change that price changes are made to respond to local market changes, such as changes to local taxes or inflation.
Earlier, Netflix globally hinted at price reviews.
“As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service,” the company told investors in its recent shareholders’ note.
MultiChoice also raised its tariffs. It blamed its third tariff hike in April 2024 in Nigeria on a fluctuating naira. The pay-TV increased its prices by at least 25.42 percent. Its Premium package rose to N37,000 from N29,500.
DStv Compact+ rose 26.26 percent to N25,000 from N19,800, and the Compact package rose 25.6 percent to N15,700 from N12,500. These price increases also impacted GOtv packages. Supa+ packages rose to N15,700 from N12,500; the Supa package rose to N9,600 from N7,600, and Max subscription price rose to N7,200 from N5,700.
“We understand the impact this change may have on you – our valued customer, but the rise in the cost of business operations has led us to make this difficult decision,” MultiChoice said.
Other firms that have increased prices, including Microsoft which recently laid off staff from its African Development Centre in Lagos. Its subscription prices for its Microsoft 365 services in the country jumped from N26,999 to N36,999 in September 2023 and N49,999 as of June 1, 2024, marking an 85.19 percent increase in 10 months.
Microsoft 365 subscription gives users access to Microsoft Teams, Word, Excel, PowerPoint, Outlook, OneDrive, and more. “As of 01/06/2024, the subscription fee for Microsoft 365 Personal will change from NGN 36,999.00 to NGN 49,999.00 to address changing market conditions. This price change enables us to maintain the high levels of service and product quality that you expect from us, and we value and appreciate your continued support,” said Microsoft.
Google has also raised subscription prices. E-Football, a popular mobile gaming platform, has also emailed its Nigerian users to notify them about increases in the prices of its gaming coins. The cost of 100 basic coins has risen from N1,300 to N1,500.
Read also: Goldman Sachs seeks huge rate rise for Nigeria, says naira weakening stoking inflation
“Our services cost about $0.50 in Nigeria. It is the cheapest in the world, and it may no longer be sustainable,” someone from a major streaming service told BusinessDay.
“The economy is becoming smaller in dollar terms, resulting in lower per capita income,” added Temitope Omosuyi, investment strategy manager at Afrinvest Limited.
