Netflix will increase the cost of monthly subscriptions for its users sometime later in the year. This is not very worrisome news because not everyone will be required to make higher payments each month to access the platform. Many subscribers are already paying the new higher rate, and nothing is going to change for them.
Same pricing for all Netflix users
On Tuesday, the popular video-streaming giant issued a reminder for all its customers who are still on the $7.99 per month tier that they will be bumped up to $9.99 per month beginning in the second half of 2016. This means that the subscribers will be required to make an additional payment of $24 each year for Netflix.
An important question that needs to be answered here is why Netflix is raising prices for some subscribers only and not all. In May 2014, the streaming firm raised the monthly subscription cost from $7.99 to $8.99 for new customers only, meaning existing customers were allowed to keep paying the lower price of $7.99 each month for the next two years, and this deadline is nearing the end.
Netflix again hiked the price of its subscription service in October last year, moving it to $9.99 from $8.99. All users will be required to pay $9.99 for their subscription starting later this year.
Top value fund managers are ready for the small cap bear market to be done
During the bull market, small caps haven't been performing well, but some believe that could be about to change. Breach Inlet Founder and Portfolio Manager Chris Colvin and Gradient Investments President Michael Binger both expect small caps to take off. Q1 2020 hedge fund letters, conferences and more However, not everyone is convinced. BTIG strategist Read More
What if users stick to old plan?
If a subscriber wants to stick to the old price of $7.99 per month, he/she can still do it, but they will not be able to watch HD versions of the shows. Also such users will be restricted to using Netflix on only one screen at a time. The $9.99 tier offers HD streaming and support for up to two simultaneous streams.
Though the increased amount is not going to make a huge difference to anybody’s budget, the fact that Netflix will add a lot of original content this year makes it a good deal. This is actually great news for the company, which recently made an announcement that it has more than 75 million subscribers globally. There are many U.S. customers among them who will be paying $2 more each month to access their favorite Netflix shows.
On Wednesday, Netflix shares closed down 0.14% at $107.74. Year to date, the stock is down by almost 6%.