Netflix To Raise Prices For New Subscribers

Netflix To Raise Prices For All New Subscribers

If you're thinking about shelling out for that Netflix streaming subscription, now may be the time to do it.

The company said in a letter to shareholders Monday that it's going to raise prices for new members by the end of June. The price increase will be "one or two" dollars per month "depending on the country." It won't initially apply to Netflix's existing members, who will pay the current price "for a generous time period."

From the shareholder letter:

In the U.S. we have greatly improved our content selection since we introduced our streaming plan in 2010 at $7.99 per month. Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only. 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.

Netflix has learned a lesson or two about how to communicate pricing changes to customers. In 2011, when the company last announced a price hike, subscribers fled, the stock price sank and Reed Hastings, the company's CEO, had to apologize to members.

It's unclear for existing members how long the grace period will be, though. When Netflix earlier this year raised prices in Ireland by one Euro, current members were locked into the €6.99 rate for two years.

Netflix has been talking about price increases for months. It experimented with tiered models at the end of 2013 and told investors in January that it was considering "pricing changes."

Last month, Amazon raised the price of its Prime loyalty program, which in addition to free two-day shipping on millions of items, includes access to a Netflix-like streaming video service.

Netflix shares rose 6 percent in after-hours trading.

This article has been updated to include background on Netflix' previous price increase

Popular in the Community