Netflix Raising Monthly Price by $19 May, 2014 By: Erik Gruenwedel
Existing subscribers won’t be affected for two years
As expected, Netflix has raised the monthly price of its $7.99 subscription service by $1 to $8.99. In an email to existing subscribers, the SVOD pioneer said current subs would not be affected for another two years.
Netflix first disclosed the pending price hike during its recent fiscal report, saying it was considering upping the monthly rate $1 or $2 depending on the country, with existing subs grandfathered in after a “generous time.”
With 46.5 million subscribers globally, the price hike could add $800 million in incremental revenue annually when fully implemented. Netflix has said it would spend the funds on content and further expansion into foreign markets.
The price hike comes less than three years after Netflix initiated a 60% price increase to its hybrid streaming/by-mail rental plan, in addition to a short-lived attempt to spin off the disc business under the Qwikster brand name. Those events saw 800,000 Netflix subs drop the service, and its stock plummet 75%.