Netflix raises the price of video streaming for new customers

New customers of Netflix in the United States, Canada, and Latin America will see the price of a subscription increase this year. The video streaming service silently admitted that new customers will have to pay $9.99 per month for access to its library of movies, television shows, documentaries, comedy specials, and more. This is for Netflix’s tier that allows for two devices to stream content simultaneously.

Price hikes should never be surprising to customers of any video and music streaming service. The service providers must pay for existing content while securing deals for additional content; therefore, additional funds from customers are required. Even Netflix and its more than 65 million customers can’t avoid adjusting prices in today’s market. It’s also why video streaming service’s — Netflix, Hulu, Amazon — are producing in-house content. They can spend less on rights fees and focus on original content without ever losing control. And subscriptions are far less sensitive to the creation of more in-house content.

This isn’t the first time Netflix has had to raise prices, either. In September 2011, Netflix’s Reed Hastings announced that the company would split its video streaming service from the DVD rentals. The latter would be transformed into a separate service called Qwikster and also carry video games. After huge backlash, Netflix reverted its plans and kept DVD rentals as part of Netflix but still raised prices.

Definitely take a look at Netflix’s Twitter account to see how concerned customers are with the subscription’s increase.

Fortunately, existing customers will be unaffected by the price hike for a limited time… that ends in October 2016.

Source: Bloomberg

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