Netflix Subscription Plans Get Pricier; This Is How You'll Be Impacted
08 Октября, 2017, 01:06 | Author: Lester Mason
Price increases at first were comparatively uncommon for Netflix-but then again, the entire idea of a streaming TV content service is, itself, barely ten years old. However, the price for that package is now increasing to £7.99 per month.
"This timing coincides with what we expect will be a strong fourth quarter of 2017 content slate, which could help minimize churn", Doug Mitchelson, an analyst at UBS, said in a note to clients.
It was only a year ago that Netflix also increased their standard HD plan $8.99 a month to $9.99 a month.
Wedbush's Michael Pachter, who is bearish on Netflix, said he doesn't expect the hike to push subscribers away, but thinks attracting new subscribers will be more hard and expects net adds to be down year-over-year in 2018.
The changes affect most of Netflix's 53 million US subscribers.
A Netflix representative said the company will email subscribers and send out app notifications on or after October 19, 30 days before their billing cycles.
The price changes will roll out to USA members over the course of the next several months, according to Netflix.
There will be no change to its basic so-called "one single screen" subscription which is €7.99 a month. The company is banking much of its future on original programming, and has said it will spend $6 billion in this year alone to acquire and produce original and exclusive programs. Pachter based his estimates on the approximately 50 million Netflix subscribers in the USA, along with revenue from new subscribers who sign up next year. But of course the "standard" and most popular plan which includes HD and two simultaneous streams is moving up from $9.99 a month to $10.99.
The price hikes will only be in the United States and will start taking effect from mid-November, depending on users' billing cycles. In 2011, they offered a DVD and streaming service for under $10. Netflix will be sending out an email to their current subscribers this month to alert them about the new, higher prices. The service also plans to raise prices in the U.K., France and Germany. "We think that Netflix is destined to be a cash-burning, high-growth company until it changes its strategy and accepts its fate as a highly profitable slow-growth company". That's not where the price increase ends, though.
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