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Netflix Raises Price of Most Popular Plan by $1 per Month to $9.99!

Posted by: on Oct 9, 2015 | No Comments

The world’s number one streaming movie streaming platform Netflix Inc. is raising the price of its most popular streaming subscription by $1 a month to $9.99 for new customers in the U.S., Canada and parts of Latin America following a similar move in Europe this year. Reports confirm that existing customers will have a grace period of varying lengths before prices go up for them, the company said on its website. The increase affects the plan that lets two viewers use a subscription at once. Prices for the so-called one-screen and four-screen plans aren’t affected.

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As of 2015, Netflix has an estimated 65 million subscribers worldwide. The company is looking to leverage its growth with a slight increase in membership cost. This additional bump in membership revenue stream will help the sustain revenues and company growth with the cost of licensing and develop new content continue to increase. This additional money can be used to help finance its growing exclusive TV and film properties. The company has $4.3 billion in programming costs over the next year, and almost $5 billion more for the following three years. So it was vital to raise the price to accommodate the necessary growth and service.

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The company is taking a better approach with this roll out unlike the poor decision they made in September 18, 2011, Netflix CEO and Co-Founder Hastings said in a Netflix blog post that the DVD section of Netflix would be split off and renamed Qwikster, and the only major change would be separate websites for the services. The new service was to also carry video games for an additional charge, whereas the previous Netflix did not. Netflix subscribers who wanted DVDs by mail would have had to use a separate website to access Qwikster. Due to massive online negative reaction from customers Netflix cancelled the planned Qwikster service on October 11, 2011 and kept the DVD-by-mail service part of Netflix. I think the cost for content will continue to increase in price as users seek to find the cheapest service yet the best content over the next few years. So this move by Netflix was vital to stay ahead of the curve. Now the only question that remain is….will customers be okay with the increase?

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