Online providers respond to national lockdown with price hikes

Broadband providers and online streaming services, such as Netflix, are responding to a national lockdown across the UK by putting their prices up and taking advantage of a captive market. 

Yesterday Virgin Media announced forthcoming price increases for its broadband, TV and phone services. The average rise would be 4%, it said. That is 13 times higher than the current consumer-price-inflation rate.

In its defence, Virgin said it did not raise prices as normal in 2020, citing pandemic-related difficulties for customers, and it plans to invest £1bn in its network this year. Other internet providers are expected to announce similar – or larger – inflation-beating increases soon.

For example, BT changed its terms and conditions last year to say it would increase broadband prices by 3.9% above the first CPI rate published every year, which this year is due in 16 days. BT’s sister companies, EE and Plusnet, followed suit.

Meanwhile, millions of Netflix users with standard and premium accounts will see prices rise by up to £24 a year. See below:

Standard price plan will rise from £8.99/month to £9.99/month (an 11% increase or £12/year). This plan lets you watch Netflix in high definition on up to two devices at once, and download shows to up to two mobile phones or tablets.

Premium price plan to rise from £11.99/month to £13.99/month (a 17% increase or £24/year). This plan lets you watch Netflix in ultra-high definition on up to four devices at once, and download shows to up to four mobile phones or tablets.

Basic price plan will stay at £5.99/month. This plan lets you watch Netflix in standard definition on one device at a time only, and download to one mobile phone or tablet. It isn’t affected by this price rise. 

Says Nick Baker, streaming and TV expert at Uswitch.com:

 “Netflix has been a lifeline for many people during lockdown, so this price rise is an unwanted extra expense for households feeling the financial pressure. 

“It’s unfortunate timing that this price hike coincides with another national lockdown, when all of us will be streaming more television and films than ever.

“During the first lockdown, the amount of streaming content watched by consumers rose a third on the previous year, and our viewing habits are likely to increase similarly this time.

“It’s worth remembering that if you feel you aren’t getting value for money from your subscription you can cancel penalty free whenever you want. 

“Alternatively, if you’re currently on the standard plan but could manage watching on just one screen, you could downgrade to a basic package for £5.99.”