Netflix to Increase Its Subscription Fee in the US

by Dale Wright

Netflix To Raise Subscription Fee Netflix to Increase Its Subscription Fee in the US

Netflix is planning its first increase in subscription fees in the US since 2011, according to comments from the company’s CEO.

The co-founder of Netflix, Reed Hastings, discussed the price hike during a call on Monday to discuss the company’s quarterly results.  Unsurprisingly, Hastings tried to dismiss the subscription fee rise as much as possible, while also admitting that it would happen.  Hastings said of Netflix’s price rise: “You’re talking about a dollar or two difference.”

Although Netflix hasn’t actually raised its US subscription fees for a long time, the streaming company managed to annoy its entire user base back in 2011 when it tried to sneak in an increase of 60 percent.  Netflix planned to split its streaming service from its DVD rental department and instead of charging $9.99 for both; you’d have to pay $7.99 for each one.  Customers reacted overwhelmingly negatively and Netflix was forced to backtrack and scrap the planned rise.

Netflix Netflix to Increase Its Subscription Fee in the US

This time, Netflix seems to have learned from its pricing dramas and will only raise the fee slightly.  Hastings also said that the majority of the extra revenue that would come from the price hike would be put straight back in to original programming creation – meaning that the service would offer better value for money to its customers.

Netflix is still trying to decide how long current subscribers would have their accounts grandfathered, meaning how long before they’d have to pay the new price.  It will most likely be between one and two years, so current US Netflix subscribers won’t have to worry yet.

The company hasn’t discussed yet whether subscription fees will be raised in any other Netflix territories, which include Europe and the UK.  It’s also unclear when the price increases could take place, so if you’re thinking about subscribing to Netflix, sign up now to lock in the lower price.