Ouch! Netflix Is Raising Its Prices, So You Better Binge Now

Violet Tucker
October 8, 2017

The changes mark the first price hike for Netflix since October 2015, when the cost of its two-stream plan jumped from $7.99 to $9.99.

Here's the scoop: New users will face a $10.99 monthly subscription fee, as opposed to the usual $9.99 rate.

"Media companies becoming more stringent on where content is licensed and rising content costs in the peak TV era could also explain the price increase".

In order to set themselves apart from the competition, streaming services like Netflix are heavily investing in original content.

In the United States, the price plans will rise by $1 to $10.99 a month for the standard service and $2 to $13.99 for the premium service.

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Netflix has raised the price on its standard and premium streaming service subscriptions. New subscribers are being asked to pay these prices from today (after their free trial period, that is), while existing members will be formally notified later this month before the hike kicks in this November. Pachter based his estimates on the approximately 50 million Netflix subscribers in the USA, along with revenue from new subscribers who sign up next year.

But the new revenue will only come if Netflix doesn't lose a ton of subscribers because of the price increase. Netflix still offers a subscription plan for $7.99 a month, but that only allows for streaming on one connected device at a time and doesn't support HD streaming.

There's no real secret behind the reasons for Netflix raising its prices.

While the basic tier users are probably happy that there is no change to their plan, Netflix will probably experience some pushback from users in the other tiers. "We think that Netflix is destined to be a cash-burning, high-growth company until it changes its strategy and accepts its fate as a highly profitable slow-growth company. Further, we expect less speculation this time as to what the price increase means for future content spending given 2018 has already been indicated at +$1b Y/Y", wrote Mitchelson in a research note.

Other reports by Guamnewswatch

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