Quick Note: Netflix to Raise Streaming Prices Later This Year for New Customers
April 21, 2014 11:09 PM
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Existing customers will have a "generous" grace period before the higher pricing kicks in
For those that have been tempted to try out
Netflix’s $7.99/month streaming plan
and have not yet signed up, you may want to go ahead and get your foot in the door before the digital media giant starts raising prices.
Netflix CEO Reed Hastings
In its Q1 letter to shareholders, Netflix stated its case, noting that it raised its streaming prices earlier this year for customers in Ireland (from €6.99 to €7.99) with minimal impact on its subscriber base. Following that positive trial run, Netflix is looking to hit U.S. customers with a price increase later this year:
Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only. Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period. These changes will enable us to acquire more content and deliver an even better streaming experience.
Allowing existing customers to keep their $7.99 plan for an extended period of time (Netflix is giving its Irish customers a two-year grace period) is a nice gesture, and one that is likely to soften the blow for heavy users of the service. And the fact that Netflix plans to use the additional funds its stands to gain from a price increase in order to provide additional content for customers is an added bonus.
In other news, Netflix also announced in the shareholder letter that it now has 35.7 million U.S. subscribers and 12.7 million international subscribers. The company also reported Q1 2014 profit of $53.1 million compared to a “mere” $2.7 million for Q1 2013.
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4/24/2014 5:11:21 AM
Yep. And the sad thing is, it won't stop. If subscriptions stay the same or increase, the greedy content owners (Read: all of the MPAA) will start getting ideas about jacking up the cost of accessing their libraries so that they can milk more $$$ out of Netflix.
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
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