Netflix just announced that it will be soon raising the price of its online streaming service an extra $1-$2 per month from the current $7.99 monthly rate. The exact rate increase is still being discussed and decided on by the Netflix corporate executives. This is only for their DVD-less streaming Netflix service. Netflix states that the way the program works is that “For only $7.99 a month, you get unlimited movies & TV episodes instantly over the Internet to your TV or computer. There are no commercials, and you can pause, rewind, fast forward or rewatch as often as you like. It’s really that easy!” We have thousands of movies & TV episodes available to watch instantly right on your TV via a PS3, Wii, Xbox 360 or any other device that streams from Netflix, or to watch instantly on your computer.”
This price increase was previously tested in Ireland when Netflix earlier this year raised prices in Ireland by one Euro, current members though were locked into the €6.99 rate for two years. Netflix has learned a lesson or two about how to communicate pricing changes to customers. In 2011, when the company last announced a price hike, subscribers fled, the stock price sank and Reed Hastings, the company’s CEO, had to apologize to members. So now they are approaching this extremely sensitive topic in another way. According to their statement to shareholders “Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only. Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period. These changes will enable us to acquire more content and deliver an even better streaming experience.” “We are approaching 50 million global members, but that is far short of HBO’s 130 million. We are eager to close the gap.”
This new rate hike would still keep the price of Netflix under the magic $10 mark, which is sort of the cutoff point for monthly subscriptions. I guess we will just have to see the exact increase when it happens soon. But for now, if you’ve been on the subscription fence about Netflix, maybe it’s time to sign up quickly to see if you can lock in the lower $7.99 monthly rate before the price hike happens.