Netflix Raises Its Prices
In May of last year Netflix made headlines after it decided to increase its standard service subscription fee by $1, from $7.99/month to $8.99/month. Most people didn’t mind. The cost was still under $10/month and existing customers were still going to be able to pay the same prices with no change in service. The only people affected were new customers, and who wasn’t already subscribed to Netflix anyway?
However, Netflix has decided to raise its prices yet again only a year later. The streaming giant has announced and already implemented its plan to increase its standard plan from $8.99/month to $9.99/month.
Original series and content licenses don’t pay for themselves. Netflix has routinely stated its dedication to continue providing more original series and licensed content year after year. This subscription increase seems to be the company’s way to make good on that promise. In an email to Bloomberg, BTIG LLC analyst Rich Greenfield said, “[Netflix]] feels like they are confident in how well they are growing and that they have the consumer love to push the price.”
Currently sporting an impressive subscriber base of over 65 million people, a single dollar means a lot more money in Netflix’s coffers. Unlike Hulu, the red giant doesn’t double dip with ad placements throughout its service. With no ad revenue to speak of, Netflix has to rely on subscriptions to generate revenue and pay for its increasing content library.
The $8/Month Plan Still Exists
Netflix still offers a Basic plan for $7.99/month that offers unlimited access to its entire streaming library. The catch is that you can’t watch any of it in HD and can only watch on one screen at a time. The standard plan, which is now $9.99/month, allows users full HD access and the possibility to watch on two screens at once, meaning your kids can watch shows in their room while you enjoy House of Cards in peace.
The company’s Premium option isn’t changing either. Anyone wanting to watch shows in Ultra HD, or those wishing to have access to four screens at once, will have to fork over $11.99/month. As with all of their plans, you have complete access to their extensive streaming library and can cancel your subscription anytime you feel the need to do so.
This Doesn’t Affect Existing Users, For Now
Existing Netflix users will get to experience the same service they’ve come to enjoy at the same price for a little while longer. Any existing users who don’t already have a price guarantee will be locked in with the old price for one year.
Frankly speaking, even at $9.99/month Netflix is still competitively priced. Hulu charges $11.99/month if don’t want commercials and an additional $8.99/month if you want to watch its Showtime offerings. Amazon’s $99/year Prime membership is technically cheaper and includes more perks for regular Amazon customers, but its content library is still largely under construction compared to Netflix’s massive library.
In the end, most Netflix users will shrug at the price increase. One dollar isn’t much to worry about, but the yearly increase routine certainly leaves room for concern.