Netflix also raised the subscription prices in Europe, where the subscribers will now be required to pay 1 Euro more. A basic plan, which only provides one stream of standard-definition video, is still $$7.99 per month.
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The abrupt price increase in 2011 triggered an exodus that cost Netflix more than 800,000 subscribers and caused its stock to lose 80 percent of its value in a tumultuous 13-month period.
Bad news, new Netflix members. The pricing on those plans will remain the same.
The standard plan, which allows two viewers to simultaneously use the same subscription, is going from $8.99 to $9.99 a month, Bloomberg reports.
Netflix is getting more expensive.
– Dale G. (@buffaloser) October 9, 2015 I’m so glad @netflix guaranteed my price for another year unlike cable companies. A premium $11.99 tier includes access to Ultra HD video and simultaneous streaming on four screens. Next year, the company is expected to spend billion on programming, according to an estimate from Tony Wible, an analyst at Janney.
Back then Netflix pledged not to raise the monthly price for their accounts for two years.
The research firm now models a terminal price of $12 for the United States, which looks very conservative, based on the current price hikes and values given compared to higher-priced (ad free) services, such as Time Warner Inc.’s (NYSE:TWXW) HBO, CBS Corporation’s (NYSE:CBS) Showtime, and Hulu. Content makers know that they’re television shows and movies are the key to Netflix’s success.
Members who signed up for this plan when it was $8 back in May 2014 will be moved to the $10 plan in May 2016.
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On Twitter, Netflix claimed that the rate hike was necessary so the company could bring “more great content to users”.
