Back in April, Netflix started the countdown to let longtime subscribers know that they were about to start paying more for their service. The price hike would increase subscription fees paid by older customers to match the company’s newer, more expensive plans. At that time, a survey found that a whopping 80% of Netflix subscribers had no idea that prices were about to increase. With that in mind, Netflix is making sure that it breaks the bad news a bit sooner this time. But just in case you missed the news, let this serve as another warning: The next round of longtime Netflix subscribers will see their prices increase next month.
“When we raised prices for new Netflix members in 2014, we kept your price the same for two years. Your special pricing is now ending and as of 7/22/16 your new price will be $9.99 per month,” Netflix wrote in an automatically generated email sent to me personally. “Please visit netflix.com to review the details of this change and your options for plans and prices. To cancel your membership before the price change takes effect, you can do so at any time by going to Your Account.”
The price hike amounts to $24 annually over the previous monthly subscription rate of $7.99, and it’s a price most customers are likely willing to pay. According to a recent survey, three-quarters of Netflix subscribers would consider leaving the service if Netflix ever started to show ads alongside its movies and TV shows. With that in mind, a $2 price hike indeed seems like a much smarter way to increase revenue and improve profitability.
According to a recent report, these Netflix price increases could generate more than $500 million annually in additional revenue.
Among popular services out there, Netflix is now one of the most expensive options. Hulu’s unlimited video streaming service starts at $7.99, though the company’s base subscription does include commercials that interrupt programming multiple times during each viewing. Amazon Prime Video is now also available as a standalone service, and it costs $8.99 per month.