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Netflix raising prices on streaming plans again

07 October 2017

The entertainment giant has increased the price on two of the three subscription tiers offered to its 52 million U.S. subscribers. Standard subscribers now paying $9.99 per month will soon pay $10.99 per month, and premium subscribers paying $11.99 per month will soon pay $13.99 per month. Netflix will be raising its prices so it can provide subscribers more exclusive content, according to Mashable.

It's unlikely the increase will deter Netflix's 100 million subscribers - especially if it comes with a promise of more high-quality original shows. The fantasy thriller was a surprise hit for the streamer past year. But don't think we didn't notice, Netflix.

And despite the subscription rate increases, Netflix is still cheaper than cable.

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"Most investors believe that Netflix is priced well below its value to consumers and want to see the management continue to increase monetisation", Rob Sanderson analyst at MKM Partners said.

The price will remain £5.99 per month. The company's chief content officer Ted Sarandos recently confirmed that Netflix will spend $7 billion on content next year alone. Perhaps now the company has demonstrated more value with its original programming, as social media response has been tepid when compared to earlier such announcements.

Netflix has treaded lightly with price increases since 2011, when it suddenly hiked prices 60% for streaming and DVD-by-mail subscribers.

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However, even though the company has been gradually increasing spending over the last few years, this is the first price increase since 2015 when the standard plan jumped from $7.99 to $9.99.

Still, Netflix customers are NOT happy - particularly customers who feel their library of unoriginal content is becoming stale. "When it does so, we expect its shares to reach our price target". Some may have to start paying the higher prices sooner than others. That's a €1 increase, not too bad. "Upside could be driven by tier downgrades vs. cancellations, and incremental subscriber growth related to promotions". This is the cheapest option, and is now not subject to the price increases.

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Netflix raising prices on streaming plans again