Netflix announced Monday that it intends to increase its monthly subscription prices by $1 or $2 later this quarter but for new members only. Existing members can enjoy Netflix streaming at current prices but for a generous time period.
Netflix announced its first quarter earnings on Easter Monday. The main highlight of this earnings call is the announcement of increasing Netflix prices. Netflix currently has 48.2 million global subscribers. Netxflix has 35.7 million subscribers in the US only. While its international subscribers are now reached a total of 12.7 million in first quarter of this year. And the company wants to improve its streaming service and is also trying to acquire more content (movies and TV shows) for its subscribers.
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Netflix is already bringing a lot more new content this summer. It is set to launch Season 2 of the Ricky Gervais series, Derek, on May 30. It will also debut Season 2 of Orange is the New Black on June 6th. The video streaming service wants to give its members around the globe "the opportunity to immerse themselves in this rich and engaging world. The trailer will give you a sense of what’s in store for this tremendously popular show.
Netflix's summer line-up also includes Hemlock Grove Season 2, the animated comedy series BoJack Horseman and the final six episodes of The Killing. And the company will keep this momentum throughout 2014 and into 2015 as Netflix bring its members additional kids series in partnership with DreamWorks Animation, and launch new original series including the epic adventure of Marco Polo; a psychological thriller from the creators of Damages; Marvel‘s Daredevil; sci-fi drama Sense 8 from the Wachowskis, and Narcos, an action-drama series from Brazilian director José Padilha on the fall of Colombian drug kingpin Pablo Escobar.
Netflix states that it "continue to invest heavily in exclusive syndication licenses for some of the best series on television. For example, in the U.S., as Mad Men enters its final season, members can jump in or catch up on every previous season’s episode on Netflix. The Walking Dead, Scandal, Bates Motel, The Following, New Girl, Sherlock and The Vampire Diaries are just a few of the exciting on-air series we offer 4 exclusively in this model. Dexter, House and Breaking Bad are no longer in production, but continue to be discovered and enjoyed everyday by a huge Netflix audience."
That is why Netflix CEO Reed Hastings and CFO David Wells intend to increase the monthly subscription prices for new members by $1 or $2 in the coming months. However, previous members can enjoy their current prices. The hike in Netflix prices would not affect the exiting members except for "a generous time period."
The video streaming site had already increased its prices in January from €6.99 to €7.99 for new members in Ireland. And the existing members are still enjoying the service at a price of €6.99/month for two years. "As expected, we saw limited impact from our January price increase," stated the Netflix CEO and CFO in Q1 earnings call.
But Netflix has not increased its prices in the U.S. since the debut of its streaming plan in 2010 although it has greatly improved the content selection. The current Netflix pricing plan offers unlimited streaming content for $7.99 per month. And there is also available a one DVD out-at-a-time plan for $7.99/month. But now the company wants to increase its prices for all new members but only by $1 or $2.
Netflix CEO Reed Hastings and CFO David Wells stated in Q1 earnings report:
"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."
It means that the new members will soon have to pay a subscription price of $8.99 or $9.99 a month to enjoy Netflix's unlimited streaming. However, exiting members can enjoy the current rates. "We want to get this done well, and make sure we grandfather people cleanly," said the CEO of Netflix.