Netflix raises prices by a $1 for new subscribers (Update)

May 09, 2014 by Michael Liedtke
In this Friday, Jan. 17, 2014 file photo, a person displays Netflix on a tablet in North Andover, Mass. Netflix is raising its Internet video prices by $1 per month for new customers and giving its current U.S. subscribers a two-year break from the higher rates. (AP Photo/Elise Amendola, File)

Netflix is raising its Internet video prices by $1 per month for new customers and giving its current U.S. subscribers a two-year break from the higher rates.

The changes mean anyone signing up for Netflix's video subscription service beginning Friday will pay $9 per month for in the U.S. The old price of $8 per month will continue until May 2016 for Netflix's existing 36 million U.S. subscribers.

The price increase, Netflix's first in nearly three years, isn't a surprise. The Los Gatos, California-based company disclosed its plans to raise its rates last month without specifying the precise amount.

Netflix Inc. says its needs more money so it can afford to pay for more original programming along the lines of its Emmy award-winning political drama "House of Cards" and critically acclaimed series "Orange Is the New Black." The emphasis on video that can only been seen on Netflix has become a major drawing card for the company as it strives to create the Internet's equivalent of Time Warner Inc.'s HBO cable network.

By delaying the price increase for current subscribers, Netflix hopes to avoid the backlash that it faced in 2011 when it raised its prices by as much as 60 percent.

The company lost about 800,000 customers within a few months in an exodus that alarmed investors, causing Netflix's stock to plunge by more than 80 percent in a year. Netflix eventually lured back subscribers and revived its customer growth, lifting its stock to record highs earlier this year.

Netflix's stock rose $2.65 to $324.31 in early afternoon trading Friday. The shares have fallen by 13 percent so far this year.

Prices for Netflix's rapidly shrinking DVD-by-mail service aren't changing. Those rates range from $5 to $20 per month, depending on how many DVDs are being rented and whether a Blu-ray option is included. Netflix ended March with 6.7 million DVD subscribers, a nearly 50 percent drop from 2 ½ years ago.

New Internet video customers can avoid the higher price if they are willing to settle for a little less clarity and flexibility. Netflix is also introducing a new $8 per month plan that will only show standard-definition video and limit viewership to just one screen.

Netflix normally offers high-definition video and allows subscribers to watch on up to two different screens. That means two people sharing the same subscription can simultaneously watch Netflix videos on different devices with high-speed Internet connections. The company already charges $12 per month for a subscription plan that allows video to be simultaneously streamed on four different screens.

Subscription prices also will be increasing by the equivalent of about $1 month in Netflix's markets outside the U.S. The company ended March with nearly 13 million international customers in more than 40 countries.

Explore further: Netflix poised to raise prices after strong 1Q (Update 2)

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Netflix poised to raise prices after strong 1Q (Update 2)

Apr 22, 2014

Netflix is preparing a sequel unlikely to be a hit with its subscribers. The Internet video service is about to raise its prices for the first time in three years to help pay for more Internet video programming such as its ...

Netflix attracts 2.25M US subscribers in 1Q

Apr 21, 2014

Netflix's first-quarter earnings soared as another season of the popular political drama "House of Cards" helped attract an additional 2.25 million subscribers to the Internet video service.

Netflix unveils video service in UK, Ireland

Jan 09, 2012

(AP) -- Netflix's Internet video service made its debut in the United Kingdom and Ireland Monday as part of a previously announced expansion that is expected to saddle the company with its first annual loss in a decade.

Netflix's Comcast deal improves quality of video

Apr 14, 2014

Netflix's videos are streaming through Comcast's Internet service at their highest speeds in the past 17 months now that Netflix is paying for a more direct connection to Comcast's network.

Recommended for you

Turner channels removed from Dish amid pact spat

1 hour ago

Channels such as Cartoon Network and CNN are no longer part of Dish's programming lineup as a deadline has passed for the satellite TV provider and Turner Broadcasting to renew their distribution agreement.

Verizon reports higher 3Q net income, revenue

2 hours ago

Verizon Communications Inc. on Tuesday reported higher net income and revenue in its third quarter, helped by strong wireless subscriber growth and demand for its FiOS Internet services.

Amazon, Simon & Schuster sign book retail deal

10 hours ago

Amazon has reached a deal with American book publisher Simon & Schuster, the companies said, though the e-commerce giant remains at loggerheads with France's Hachette over e-book pricing.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

ali_jawad_940
not rated yet May 11, 2014
One more reason to use thevpn.guru/how-change-my-netflix-region-vpn-dns-proxy/ to get ALL Netflix regions from American to UK and Latino