Netflix to Raise Prices for New Customers
Netflix announced Monday that by the end of June, the company plans to raise subscription prices for new members by $1 or $2 in an effort to offer a wider variety and better quality streaming for customers. Netflix explained in a letter to shareholders that existing members will eventually have to pay the increased price, but that would not come into effect “for a generous period of time”. The exact price increase will depend on the country. Netflix reports that in the first quarter of 2014, 4 million new subscriptions were purchased bringing the total global subscriber count to 48 million.
Netflix attributes the increase to a rise in demand as more shows and original content–like “House of Cards” and “Orange is the New Black”–are available to users. Back in 2011, Netflix announced a plan to raise DVD delivery and streaming services to $16 a month, but it was met by too much backlash and a steep stock decrease so no action came of it. Monday’s announcement came with much less opposition and Netflix shares were up 7% by the end of the day.