Netflix is reportedly planning to raise their prices by a dollar or two later this year. This news comes a little more than a month after Amazon announced that they were raising the price of their own streaming video service, Amazon Prime. Except in the case of Netflix, it doesn't sound like this price hike will affect current subscribers... at least not right away.
Variety reports that Netflix has announced plans to increase the cost of their streaming video service "by one or two dollars monthly for new subscribers later in the second quarter of 2014." It sounds like the exact total of the increase will depend on the country.
Those already paying for a Netflix subscription can rest assured that the monthly cost won't go up, at least not right away, as Variety goes on to say that existing members will be grandfathered into the current pricing "for a period of time." That period of time could be up to a year or two.
Grandfathering in loyal customers is an approach I wish Amazon Prime would have taken when they announced their own plans to increase the annual cost of their service. Not only is it a nice reward for paying customers, but I've always taken that as a major incentive to stay with something. If a canceling customer learns they might have to pay more if they want to come back, they might reconsider canceling.
As mentioned though, Netflix's plan to keep their pricing the same may be a temporary thing. Sooner or later (hopefully later), we'll have to pay more than $7.99/month for our streaming content. Still, even if it's a dollar or two more a month, the price seems competitive enough -- factoring in the available content -- by comparison to the cost of cable. And on the bright side, the price increase will hopefully allow them to acquire more content, which is the plan according to Netflix CEO Reed Hastings and CFO David Wells. Asking for more money in exchange for better service isn't such a bad thing if they're planning on delivering on that.
Netflix tinkered with their pricing model last quarter as well. As we learned late last year, Netflix tried out a new pricing model geared toward solo users, offering a cheaper subscription option that limited the user to a single device and standard definition. That was something Netflix was just trying out though, and it doesn't look like they've opened that option up to all of their subscribers, though Variety says they're still evaluating that. At present, the two plans widely available in the U.S. are "Watch 2 screens at the same time" for $7.99 a month. And "Watch 4 screens at the same time" for $11.99 a month. Limiting the number of screens per account likely discourages account sharing.
No one likes to have to pay more, but I'm not feeling all that upset over this news, to be honest. When we factor in the constantly fluctuating content Netflix offers, including current TV series and the great original content they've begun to give subscribers in recent years -- and whole seasons at a time! -- and the fact that the price is still really reasonable, especially by comparison to the cost of cable, one or two dollars isn't so bad.