The New Netflix Price Increase and How It Will Affect YouMike Sampson |
Netflix announced on Monday some good news for subscribers: they'll be actively working to improve the quality of their movie and TV choices as well as improving their streaming service. The bad news? You'll be paying for it.
Netflix CEO Reed Hastings announced during a shareholder webcast on Monday that the company will be increasing their subscription prices starting this summer. The company intends to increase the current monthly subscription rates of $7.99 (for two simultaneous streams) and $11.99 (for four simultaneous streams) by $1 or $2. So, will this affect you?
The Netflix price hike is expected to impact only new customers with existing customers grandfathered in at their current rate for "a generous time period" that is expected to last one or two years. After that, all customers would be paying the same rate. The price increase is expected to vary depending on country, but it's unclear exactly which countries would be paying more. (We're going to go out on a limb and say the U.S. will be on the high end of the increase.) No specific date was given for the price hike other than it would take place before the end of this quarter (which ends on June 30), but if you want to avoid the Netflix increase (at least for the time being), you might want to think about signing up for an account now.
This Netflix increase is the first since 2011's ill-fated Qwikster announcement that would've spun off the DVD-by-mail service into a separate service. The company quickly reserved course but not before it lost 77 percent of its stock's value and over 800,000 subscribers in one quarter.
To help explain the move, Hastings mentioned that, "If we want to continue to expand...we have to eventually increase prices a little bit." The hope is that people, who have loudly complained about the quality of Netflix's offerings, would have a larger budget to acquire new titles of both original and existing content. Hastings added that the increase in revenue would allow them to "license much more content and deliver it in very high quality video."