Netflix is raising the price for its most popular U.S. video streaming plan by 10 percent— a move that could boost its profits but slow the subscriber growth that drives its stock price.
The change announced Thursday affects most of Netflix’s 53 million U.S. subscribers.
WHAT GOES UP
Netflix will now charge $11 per month instead of $10 for a plan that includes HD and allows up people to simultaneously watch programs on two different internet-connected devices.
The price for another plan that includes ultra-high definition, or 4K, video, is going up by 17 percent, to $14 from $12 a month. A plan that limits subscribers to one screen at a time without high-definition will remain at $8 a month.
The increase would be the first in two years for Netflix, although it won’t seem that way for millions of subscribers. That’s because Netflix temporarily froze its rates for long-time subscribers the last two times it raised its prices, delaying the most recent increases until the second half of last year for them.
Netflix isn’t giving anyone a break this time around. It will start emailing notifications about the new prices to affected subscribers Oct. 19, giving them 30 days to accept the higher rates, switch to a cheaper plan or cancel the service.
WHY PRICES ARE RISING
The price increase are being driven by Netflix’s desire to fatten its profit margins as it spends more money to finance a critically acclaimed slate of original programming that includes shows such as “House of Cards,” ”Orange Is The New Black,” ”Stranger Things,” and “The Crown.”
Those series’ success helped Netflix land more Emmy award nominations than any TV network besides HBO this year. It’s also the main reason Netflix’s U.S. audience has nearly doubled since the February 2013 debut of “House of Cards” kicked off its expansion into original programming.
But paying for exclusive TV series and films hasn’t been cheap. Netflix expects to spend $6 billion a year alone on programming this year, and the expenses are likely to rise as it competes against streaming rivals such as Amazon, Hulu, YouTube and, potentially, Apple for the rights to future shows and movies.
Both Amazon (at $99 per year, or about $8.25 per month) and Hulu ($10 per month) now offer lower prices than Netflix.
POSSIBILITY OF BACKLASH
Netflix believes its price rate is justified by recent service improvements, such as a feature that allows people to download shows onto phones or other devices to watch them offline.
But Netflix subscribers have rebelled against price increases in the past, most notably in 2011 when the company stopped bundling its streaming service with its DVD-by-mail service, resulting in price increases of as much as 60 percent for customers who wanted both plans. Netflix lost 600,000 subscribers and its stock price plummeted by 80 percent in the subsequent backlash. The company rebounded strongly, though, propelling its stock from a split-adjusted low of $7.54 in 2012 to about $184 now.
And Netflix blamed a temporary slowdown in subscriber growth last year on the lifting of its price freeze on long-time customers who decided to drop the service rather than pay slightly more money.
Wedbush Securities analyst Michael Wedbush believes less than 10 percent of current subscribers will cancel Netflix as price rise again, but he predicts it will be tougher to attract new customers who will choose cheaper alternatives from Amazon or Hulu.
Private Life Netflix Movie Trailer
The new film from Academy Award-nominated filmmaker Tamara Jenkins (The Savages, Slums of Beverly Hills), PRIVATE LIFE is the bracingly funny and moving story of Richard (Academy Award-nominee Paul Giamatti) and Rachel (Kathryn Hahn), a couple in the throes of infertility who try to maintain their marriage as they descend deeper and deeper into the insular world of assisted reproduction and domestic adoption. After the emotional and economic upheaval of in vitro fertilization, they’re at the end of their middle-aged rope, but when Sadie (breakout newcomer Kayli Carter), a recent college drop out, re-enters their life, things begin to look up.
Netflix’s spooky ‘Sabrina’ trailer is nothing like the ’90s sitcom you remember
If you’re a fan of the sitcom Sabrina the Teenage Witch…Netflix’s Chilling Adventures of Sabrina may not be for you.
The first trailer for this dark take on the powerful teen (from the makers of Riverdale) promises creepy woods, minotaurs, the occult, and a terrifying cover of “Happy Birthday.” And it’s just a teaser!
Chilling Adventures of Sabrina stars Kiernan Shipka (Mad Men), whose half-human half-witch identity clashes along with the magical and mortal worlds. A far cry from its ’90s cousin, Netflix describes CAOS as “tonally in the vein of Rosemary’s Baby and The Exorcist.” So…no animatronic cat?
Chilling Adventures of Sabrina hits Netflix Oct. 26.
Netflix’s Quincy Jones documentary drops trailer with too many legendary stars to count
“Quincy Jones has too many awards, accolades, and accomplishments to list.
And the legendary musician and film producer’s upcoming Netflix documentary, directed by his own daughter Rashida Jones, features almost as many stars.
The trailer for Quincy shines a spotlight on the influence he had on some of the most talented people in the entire entertainment industry: Oprah Winfrey, Kendrick Lamar, Will Smith, Lady Gaga. And we heard a little Barack Obama moment in there too.
But the doc appears to focus on his life both before and after becoming the iconic Quincy Jones.
You can catch it on Netflix Sept. 21.”
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