If you’ve been with Netflix for two years or more and have been enjoying High Definition content for $7.99 a month, the company wants to reward your loyalty … with a price increase. According to a recent notice to shareholders, sometime during the second and third fiscal quarters of 2016, price grandfathering on the HD plan will end.
When this happens, customers on the grandfathered plan will receive a notification of the change. Those consumers will have the choice of remaining on a $7.99 per month plan, but only receiving Standard Definition content, or upgrading to a $9.99 monthly package with HD video. Netflix expects “only slightly elevated churn” from the pricing changes.
What will you get for that extra $2 per month? Netflix’s plans for 2016 include launching more than 600 hours of original programming, up from around 450 hours in 2015. There will be new seasons of around 30 of Netflix’s original series, including “The Crown” and “The Get Down.” The new year will also see eight new feature films, 35 new seasons of original series for children, a dozen documentaries, and nine stand-up comedy specials.
Netflix has deep penetration in the streaming video market, and I’m sure the price increases won’t do much damage to their subscriber base. As their content licensing deals change, the company surely needs to raise prices, and a $2 hike isn’t really all that much, considering the amount of new content being offered.
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