The world’s famous online TV network has raised its monthly subscription charges again to its new customers from costing around $9 per month to $10 per month. The fees previously used to be $8 per month.
The increase so far for the new subscribers is implemented in the U.S., Latin American countries, and Canada. Customers have not yet made any complaints regarding the increase because Netflix Inc. has always managed to meet the customers’ expectations. New customers are not reacting to the increase either.
The increase will not be a hurdle in the ongoing growth and success of the provider according to the laidback reaction of the users. This increase also proves the pressures that the company is facing due to its competitors, such as HBO, and many other video streaming services.
Many sources on the internet are acknowledging the success of the corporation recently. The huge contribution to the growth is Netflix TV shows, which have been gaining popularity worldwide, such as Unbreakable, Orange Is The New Black, and House of Cards.
Netflix has plans on starting its own in-house production like HBO so that it can have exclusive rights to distributions and publishing of the TV shows. However, this decision will lead it to lose the rights of publishing it receives from other production studios because automatically, those studios would consider it as a competitor rather than a promoter or accomplice. The reason for the increase is also the expansion of the company on every level and expansion of any business requires investments and expenditures.
The CEO, Reed Hasting on the other hand is worried about the increase. When the same happened before, the costumers reacted very aggressively, 60% were increased for users who wished to use DVD via mail rentals and Internet video. He simply does not want the incident to repeat at any cost whatsoever. The company lost many customers since the last increase in 2011 leading to the stock losing 80% of value in over a year. Therefore, now it is just raising the price for new subscribers, the old ones can still pay $8 per month.
The streaming services giant plans to announce its quarterly earnings on Wednesday. Analysts are positive about the results because the company has proven to be on target recently, obviously because of its international growth.
Netflix announced third quarter growth having around 2.4 million international users and 1.15 million local streaming users. The numbers are growing regardless of the dollar increase. It stock closed at $113.45 on October 12.