Netflix's price hike likely means strong subscriber growth on the way

Netflix's price hike likely means strong subscriber growth on the way

Netflix's price hike likely means strong subscriber growth on the way

On the other hand, with Amazon offering cheaper streaming costs and throwing in Prime music and photo storage as well, Netflix's pricing bump might just offer a push to price-conscious customers who were already on the verge of switching.

TV and movie streaming giant Netflix is increasing the price of some of its subscription packages, with users to be charged an extra 50p or £1 per month. The standard service, which allows people to stream up to two screens, will soon cost $10.99 per month instead of $9.99. This is the first time the company has increased prices in two years, USA Today reported. If you are on a promotional plan, like the 2 for $100 that it was running a few months ago, you aren't eligible for Netflix On Us (and actually need to upgrade to the two lines for $120 plan). Notifications will be sent out to customers October 19 with a 30-day notification to allow customers to opt-out if they want. Shares rose 5% during intraday trade following the news and hit an intraday high during trading Friday morning, suggesting investors approve of the increase.

But beyond its immediate impact on subscribers, the price hike foreshadows a future in which the streaming video market is dominated by a handful of players that have captured the majority of a family's limited entertainment budget.

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Here's the scoop: New users will face a $10.99 monthly subscription fee, as opposed to the usual $9.99 rate.

The increase can also be attributed to Netflix's production of high-quality original content like House of Cards, Orange Is the New Black, and Master of None.

While the latest price hikes aren't huge, they underscore Netflix's ambition to create more original content, both ongoing series and original films too. Starting Oct. 19, the company will begin notifying existing members about when their prices will increase; Netflix said it will notify users at least 30 days in advance, based on billing cycle, on when they will see the price change.

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