Netflix Will Hike Subscription Rate for New Customers

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As expected, Netflix is getting more expensive, but only by a dollar or two, and only for new customers – at least for now.

The Internet video powerhouse on Monday announced its plan to increase subscription rates for new subscribers sometime in the next few months. The company says existing customers will continue to pay $7.99 per month for streaming “for at least the next year,” The Associated Press reports.

“If we want to continue to expand, to do more great original content … we have to eventually increase prices a little bit,” Netflix CEO Reed Hastings said in a conference call with analysts Monday.

Also on Monday, Netflix reported earnings ahead of expectations and a growth of 4 million subscribers. The new subscriber price hike could mean big bucks for the streaming service. According to Forbes:

With the company set to surpass 50 million streaming subscribers by the second half of 2014, the price increase could add between $600 million and $1.2 billion to the company’s revenues within the next two years. And if all goes according to plan, Netflix can potentially experience the opposite effect it did when it last tried to raise prices in 2011.

Netflix tried to separate subscriptions for DVD rentals and streaming services in 2011, and billed separately for them. It proved to be a disaster, with canceled subscriptions and a drop in stock.

The mailed-DVD side of the business is shrinking. AP says:

Through March, Netflix had 6.7 million DVD customers, a 52 percent drop from 13.9 million just two years ago. Netflix isn’t changing its DVD prices, despite rising postal costs.

Are you a current Netflix subscriber? Will you pony up an additional $1 to $2 per month when the grace period for existing Netflix customers is over? Share your comments below or on our Facebook page.

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  • Foxie Jackson

    Hi as for me I’m already a customer of Netflix but if within a year or so the price go up yes I will cancel…because already there’s no good movies only a few only old movies a few realty shows. So anything more than 7.99 will not be worth it. All u guys talk about is how much money u gonna make not how u gonna approve the streaming and Dvds it would be nice to get newer movies and realty shows. Thank. JJ

  • Y2KJillian

    Netflix for $1 or $2 more a month? We would pay if they doubled their charges. We LOVE Netflix compared to everything else we’ve ever used, and they’re cheap at four times the price! Our last cable service was over $70 a month and they even charged us $5.98 a month for a remote control in spite of two years of protests! We love Netflix, we love their rating system that helps us choose shows that we might like; they’re surprisingly accurate, anything below three stars and chances are very good we’ll dislike it…we love being able to watch whatever, whenever, and if we have to wait for something specific, that’s fine, there’s always something. Even when we used regular TV, we often didn’t catch a whole season or even some shows at all, cue to scheduling, theirs and ours…the cable channels except a few premium ones still have advertisements that we hope never to go back to, and we don’t really care about local broadcasts. Netflix let us watch the presidential debates, and if war is declared we’ll see it online. We feel calmer with Netflix than with constant news updates and ads, are less likely to spend money we don’t want to spend (the last time we had regular TV every 15 minutes we were bombarded with new car ads…just for an example) — we have 122 movies/documentaries/comedians in our DVD queue and are watching 19 ongoing series on our streaming, and we are about as happy as we could possibly be with Netflix! Long may they wave!