Good news for investors of Netflix, Inc. (NASDAQ:NFLX) and bad news for those subscribed to its content streaming service as the company raised the price for its monthly membership. The prices went a dollar higher from $8.99 to $9.99.
The company announced the news earlier today, causing a 6% rise in the value of its stock. The new prices will immediately take effect for new subscribers in Canada, USA and Latin America. Subscribers who are already signed in to the service will experience the new prices from October 2016.
The company released a statement saying the mild rise in the monthly subscription price is intended to help the firm bring on board more movies and TV shows and original content. The statement further issued gratitude to its existing customers and added that the extended one year period before the price is updated is part of Netflix’s way of saying thank you.
The price change will only affect those subscribed to the standard plan while those subscribed to the $7.99 non-HD option will continue paying the regular prices. The $11.99 option family option that allows multiple devices will also not be affected by the price change.
Some users have taken to social networks to express their frustration with the price update. The new price means users will have to painfully part with $12 more every year in order to access the streaming catalogue offered by Netflix.
The decision to raise the price for the already signed-subscribers is probably influenced by the pledge that the company had made not to raise the monthly subscription fees for two years. Though the company claims that the other packages will not be affected, there is not guarantee that it will remain that way in the future.
The new prices for the standard package will now be less competitive with Netflix’s rival streaming services such as Amazon and Hulu. Since the company has always delivered, perhaps the new prices will indeed usher in more interesting content on the service.
Sources: techspot, money.cnn.com