Netflix to Increase Prices for Over 17 Million Subscribers
- Updated: April 8, 2016
Netflix last year raised the price of its most Standard option to a monthly rate of $9.99. However, if you were a subscriber at the time of the increase, your account was grandfathered at the rate at that time which was $7.99 or $8.99 monthly.
However, starting in May, the honeymoon with subscribers and Netflix will end. The video streaming service will be ending its grandfather protection and increase the monthly rates to $9.99.
The streaming service offers three services at the current time. Its most basic is $7.99 per month and is known as Basic allowing for only one television to be used at any given time.
The second is $9.99 month that is the aforementioned Standard plan that allows two televisions at one time.
The third and last option is for $11.99 per month for Premium, which allows for four screens at one time.
The most popular option is Standard as it allows the majority of households to see what they want at times they want, without too many problems.
When Netflix started to increase monthly rates and announced that people were grandfathered in, they also started to explain it would not last forever.
The preferential treatment said Netflix would end, but the company has been quite silent about when until now. It turns out, the honeymoon is over in May, which is less than a month away.
The change in price will affect close to 17 million subscribers or 37% of the Netflix U.S. members.
Netflix raised its prices back in May of 2014 and said at that time the grandfathered accounts would eventually be increased to equal those who purchased after the increases were made.
Not many people were aware of this or if they were, they had forgotten. A recent survey said that 80% of those people who will have their rate increased said they knew nothing about it.
Some estimates have said that as many as 4% of the subscribers will leave Netflix due to the increase.
Other people have said even more might abandon ship, with one analyst saying it could reach as high as 5%.
The streaming service will be earning more than $34 million more each month due to the increase. Customers are already wondering where and for what it will be used for, with many asking for better and newer content.
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