Uh-Oh, A Netflix Price Hike Is On Its Way
Netflix announced some good and bad news Monday. The good: Netflix isn't going anywhere, as they reported a quarterly revenue topping $1 billion. The bad: subscription costs are movin' on up. Netflix will raise prices for new members later in the year, bumping the cost up one to two dollars. The changes would go toward acquiring more content and delivering "an even better streaming experience," according to the company.
The price hike targets new subscribers, for now. While existing members will stay at their current price ($7.99 a month for those in the U.S.), Netflix says the fees will be in place "for a generous time period." It's unclear how long the company's kindness will last. In Ireland, charges for new members increased in January from €6.99 to €7.99, with existing users grandfathered in at the former price for two years. We can only hope for such mercy.
In a statement to investors from CEO Reed Hastings and CFO David Wells , Netflix said the increase would depend on the country. Its number of global subscribers totaled 48 million, and the company earnings report said it added 2.25 million U.S. customers in the first quarter.
The success is promising, but they're not stopping there. The company touted its accomplishments in competition with big TV networks and Internet firms like Amazon, Hulu, and Microsoft, adding that its advantages are attributed to factors like "Internet on-demand consumption and targeted show marketing." However, as Netflix approaches 50 million global members, Hastings and Wells say it's "far short of HBO's 130 million. We are eager to close the gap."
The change comes shortly after Netflix lowered its monthly fee to $6.99 for subscribers who plan to watch on only one screen. As the video streaming site gains power, our wallets will be taking the hit. It may be a small price to pay to enjoy original quality programming like House of Cards, which the company highlighted as a "big hit" that "attracted a huge audience that would make any cable or broadcast network happy" in its second season.
Despite the looming increase, the site isn't losing steam just yet. A new survey of web users' entertainment habits pins Netflix as the leading online video site, beating out YouTube for the first time. The report also found subscribers were increasingly less likely to leave the service, with 69% saying they were “not at all likely” to cancel their subscriptions in the next three months, compared to 66% of subscribers one year ago