Netflix to Raise Prices in November

Netflix to Raise Prices in November

Netflix to Raise Prices in November

The more exclusive the site gets the more it will cost.

You'll be paying more than ever before to binge watch your favorite Netflix shows this winter, after the streaming service announced a price hike for two of its popular packages.

Netflix Inc. quietly hiked the cost of two of its subscription tiers slightly on Thursday.

UBS analyst Doug Mitchelson said the timing of the price increase coincides with what his firm expects will be a strong fourth quarter content slate that could help minimize churn. Then Netflix last raised prices over a year ago, when it bumped the Standard plan from $7.99 to $9.99. Netflix will begin notifying members of the change on October 19.

This week, Netflix made a decision to raise its prices a bit on some of its plans. In August, Ted Sarandos, Netflix's chief content officer, told Variety that the company planned to spend about $7 billion for original programming next year.

Those who are currently on the $9.99 plan will now have to add one more dollar and pay $10.99 per month.

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The price changes applied immediately to new customers and will roll out in the weeks ahead to current subscribers.

Original productions cost money, after all, and it's not a particularly hard price increase to swallow. The service also plans to raise prices in the U.K., France and Germany.

Wedbush's Michael Pachter, who is bearish on Netflix, said he doesn't expect the hike to push subscribers away, but thinks attracting new subscribers will be more hard and expects net adds to be down year-over-year in 2018. "I don't think we'll see an immediate impact (on Netflix subscriber numbers), but this could affect subscriber growth in the first or second quarters (next year) for Netflix".

"Assuming no churn, we estimate that a $1 / $2 increase could drive ~$650-700M in incremental revenue in '18".

While it's not a major increase in price, it's the regularity of these increases that will start to make a difference.

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