If you are enjoying your Netflix account, you will soon be paying a little bit more to keep doing so. Netflix is going to be increasing the membership fee for some of the more popular streaming plans available to customers by one dollar, which means a year of Netflix the way you are currently enjoying it may cost you an extra $12 to $24 a year.
A price incresase for a popular service is hardly unheard of, and Netflix has gone through price increases in the past. And if you subscribe to the most basic monthly plan of $7.99, then you have no need to be concerned about the pending price adjustments as that plan will remain $7.99 (for streaming on one screen at a time at the simplest resolution). Those who prefer the ability to stream in HD or 4K will be the ones paying the extra $1 or $2 per month.
According to multiple outlets, including Tech Crunch, Netflix will bump its $9.99 HD streaming to two separate devices plan up to $10.99, and the streaming for up to four devices plan will be bumped from $11.99 to $13.99. In the long run, this may not be much of a big deal for most consumers, even if it adds up over time. But the price increases will help Netflix continue to expand its services and improve the quality of streams for future use by consumers, as well as fund ongoing and new Netflix-exclusive projects.
News of the price increases have led to instant results on Wall Street, with confidence in the company’s future boosting stocks to $192.24 per share. It may be no coincidence that the news comes shortly after Netflix seemingly took a mild blow when Disney decided to pull its library of Netflix items for its own streaming service. Clearly, the loss of Disney titles did little to hurt Netflix’s future prospects for now.
Netflix remains a strong leader in the streaming industry because it has the funds to invest back in its operations. The successful streaming giant has invested $7 billion in content for the next year, according to The Wrap, while companies like Hulu “only” have $2.5 billion invested in content for their streaming services. Netflix’s reach beyond North American consumers is also providing optimism for the future of the company’s business as well.
“If [Netflix] can get just 5 percent of households outside of US and China that are in the below-average income and 12 percent of households that are above average-income — compared to the 50 percent share of [US] households we estimate they’ll have by 2020 — that’d give them 100 million international subs by 2020,” analyst Michael Olson said to The Wrap. “You don’t need to have huge penetration, and there’s no heroic assumption there — that’s realistic and that’s the biggest potential for them.”
The $1 or $2 increase may not be much to you, but that adds up quickly for a company with a potential subscriber total over 100 million beyond North America.