Netflix plans price hike

Netflix plans price hike

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SALT LAKE CITY — Netflix subscribers may have to fork out $1 to $2 more per month if they want to keep feeding their video-streaming addiction in the near future.

The company announced its plan to raise prices Monday. The move comes after Netflix raised prices for new members from €6.99 to €7.99 in Ireland in January with little impact, according to a letter to shareholders.

"Our current view is to do a one-or-two dollar increase, depending on the country, later this quarter for new members only," the letter reads. "Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period. These changes will enable us to acquire more content and deliver an even better streaming experience."

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This will be the first time Netflix has raised its prices since 2011, when it tried to raise prices by 60 percent and turn its DVD-by-mail option into a separate subscription service called Qwikster. Netflix eventually dropped the move to create Qwikster after public backlash, but not without losing 800,000 subscribers and 77 percent of its stock's value, according to CNET.

However, raising the price from $7.99 to $9.99 would likely face little resistance in the U.S. now, Evercore Partners analyst Alan Gould told Reuters. With close to 50 million current Netflix subscribers, he said the company could raise as much at $1.2 billion with the price hike.

Netflix CEO Reed Hastings told CNET that added revenue would largely be used to continue creating original content, like the company's recent shows "House of Cards" and "Orange is the New Black."


The main motivation is to provide more great things to watch, but content delivery costs are part of the costs we have to pay.

–Netflix spokesman


The announcement also comes shortly after Netflix signed a deal with Comcast to increase streaming speeds, leading some to speculate that the agreement played a role in the rising costs. Others have said they believe Netflix is merely taking advantage of the timing to deflect ill-will about the price change from itself to Comcast, an analyst told The Washington Post.

Netflix spokesman Joris Evers told The Washington Post that "the main motivation is to provide more great things to watch, but content delivery costs are part of the costs we have to pay."

Since the announcement, Netflix's shares have risen more than 9 percent, Reuters reported.

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Natalie Crofts

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