mouthofthetyne.com December 15 2017




Netflix to increase subscription prices

December 15 2017, 12:22 | Frederick Owens

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The price hikes will begin to go into effect in November, depending on individuals' billing cycles.

Most of the subscriber growth came from outside the U.S., where Netflix has invested heavily in establishing itself as a global television service.

Netflix is raising the price for its most popular U.S. video streaming plan by 10 percent - a move aimed at bringing in more money to outbid HBO, Amazon, and other rivals for addictive shows such as "Stranger Things".

"People don't like price increases, we know that", CEO Reed Hastings said on an earnings call past year.

They entered the Australian market offering cheap access to streamed content, now Netflix is looking to lift their prices for the second time in 24 months.

"Our 2S (watch on two screens at the same time, High Definition when available) and 4S memberships (watch on four screens at the same time, includes High Definition and Ultra High Definition when available) have been increased slightly".

Bad news, Netflix members: prices are going up.

Netflix will begin emailing subscribers of affected plans on October 19, allowing them 30 days to opt-in for the higher rates, switch to a cheaper plan or cancel their subscription. About a third of subscribers get Netflix's Basic plan, according to RBC surveys, and the price of that service will remain $8 a month. When the grandfathered rates for long-time users expired in 2016, the company was hit by higher-than-expected churn rates.

A price incresase for a popular service is hardly unheard of, and Netflix has gone through price increases in the past.

Netflix had earlier said it would spend over $6 billion this year on original shows and expected to have negative free cash flow of $2 billion to $2.5 billion.

The last time prices increased for the streaming services was in 2014 and the process took almost two years to roll out to all customers. Netflix shares rose up 3.7% in midday trading, putting the stock on track to close at an all-time high. Since then, the company has added a downloading feature, introduced interactive content, and announced a slew of new content. In its last earnings report, Netflix said it had 51.92 million USA streaming subscribers.



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