Netflix, one of the world's leading paid online video service, is adding $1 to the price of its most popular service.
This means that the plan that allows two users to view a subscription simultaneously it will now cost $9.99. This price increase will immediately apply for the new customers from U.S., Canada and parts of Latin America. According to Bloomberg, Europe already got this change in price ahead last year.
While this may be a bad news to the more than 65 million Netflix subscribers worldwide, the company has announced in their website, that existing customers will be given a grace period of varying lengths before prices go up for them. In addition, the change in price will not affect the so-called one-screen and four-screen plans.
According to Bloomberg, Netflix heavily relies on customer gains and higher prices to sustain income growth and shoulder the cost of its film and TV offerings. It has also been reported that the company has $4.3 billion in programming costs over the next year and a projected $5 billion cost for the following 3 years. The company reportedly has been raising prices slowly since 2011. The increase will cover cost of licensing shows and sustain a growing number of original programs.
According to an email written by Rich Greenfield, "It feels like they are confident in how well they are growing and that they have the consumer love to push the price."
One of the new original film that will debut soon is "Beasts of No Nation". According to Vulture, the announcement came just a week before this new film is set to premiere. Netflix has also announced that other streaming plans will reportedly not change. So on a brighter side, it was said that for those who don't want to play the extra $1 for watching "Orange is the New Black" on Netflix, the non-HD quality on screen is still available at $7.99 a month.
Do you think the additional $1 is not that big if it means more originals films from Netflix in the future?
