Netflix is raising its prices
- Author: Darren Santiago Oct 06, 2017,
Oct 06, 2017, 0:13
The Netflix price increase will have subscribers to two of the company's three packages paying more. The premium plan increases the number of simultaneous screens to four from two and provides 4K video.
There is some good news for subscribers to Netflix' basic, single-screen streaming plan. Earlier this week, Netflix's chief content officer Ted Sarandos announced the company's plan to spent $7 billion on original content next year. Nearly exactly two years ago, Netflix raised its prices for new members and began to "un-grandfather" existing customers into the new price levels.
Netflix says customers will be notified of the change based on their billing cycle, beginning on October 19th. Those with top-tier service will see prices go up from $11.99 to $13.99.
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It's the first time the company has raised prices in two years.
That original content is not cheap; CNN reports that Netflix is spending about $16 billion on these shows, movies, and specials. The aim is to cover sky-high content costs as the search heats up for the next Orange is the New Black or House of Cards for Netflix to go up against Amazon's Transparent and Hulu's Emmy-winning The Handmaid's Tale. The cost for its entry-level $7.99 service stays the same.
Netflix's "content prowess" gave it the pricing power to raise prices, according BTIG Research's Rich Greenfield, sooner than the analyst expected.
The most popular plan, the midtier one going up a $1 to $10.99 a month. Although in somewhat of a classy move, Netflix was raising the price gradually, something they called "un-grandfathering". Making new subscribers pay up starting now also makes the decision to launch the second season of Stranger Things later this month that much more impressive.