An increase in plan prices will certainly help Netflix with its revenue growth, so long as the company can offset cancellations and adjust to new subscription growth expectations. The service stated that the changes will happen over the next few months, and all subscribers will be told at least 30 days in advance, based on their billing cycle.
We actually believe that these price increases rarely encourage people to actually cancel because of the price, but because they instead mark a good time to evaluate the value of a Netflix subscription. Netflix most recently raised prices for new subscribers in late 2015, with the change being rolled out to existing subscribers in mid-2016.
In a statement to Mashable released on Thursday, the streaming giant said that the price increases were due to the flood of new TV shows and movies debuting on Netflix. Premium tier pricing will increase from $11.99 to $13.99.
Apparently banking on fans' appetite for another 1980s Hollywood nostalgia trip, Netflix has decided now is the time for a price bump.
The hike comes just as Netflix fans prepare for the hotly anticipated second season of Stranger Things.
The most popular plan, the midtier one going up a $1 to $10.99 a month.
Netflix has already begun raising its prices for new customers to the service, and will start raising the prices for its current subscribers on October 19. The company expects to spend almost $7 billion on content for its service next year, including movies, TV series and comedy specials.
"People don't like price increases, we know that", CEO Reed Hastings said on an earnings call previous year. That said, Hulu and Netflix are still cheaper than the $15 monthly price tag on HBO accounts.
All your favourite Netflix shows are about to come at a higher price.