Netflix Price Increase to Affect 17M Users

Netflix Price Increase to Affect 17M Users

Millions of Netflix customers will start paying higher charges for their Netflix subscription starting next month, but, a lot of them have no idea about it.

In May of 2014, Netflix increased their monthly fee for the tier that allows HD viewing on up to two screens from $7.99 to $9.99 per month. So if you were one of the lucky ones who hopped aboard the Netflix train before May 2014 (like me), you got grandfathered into the new plan, so you could keep paying the original rate of $7.99. Analysts at UBS have estimated that this change will affect about 37% of USA subscribers, or 17 million people.

Two more dollars a month could be worth it even if the company doesn't announce the price adjustment, considering that the video streaming company has plans to introduce new features to its platform later this year.

Interestingly enough, the same research also showed a 15 percent of users that will cancel their subscription due to the price changes.

Later this month, Netflix customers in the United Kingdom will begin to be "ungrandfathered", the company said. Basically, when you signed up for Netflix, the cost was $7.99 per month to become a new subscriber.

Netflix said all affected members will be notified by email and within the service, so members have time to decide which plan works best for them. There are some 75 million subscribers already and Netflix expects to add 6 million more through the first part of this year.

UBS found that it costs only nine cents an hour to watch content on Netflix, compared with the 30 cents it costs in a traditional TV package.

While 41% of respondents in UBS's November 2015 survey said they were not willing to accept any price increase for Netflix, Mitchelson expects churn to be relatively low given customer loyalty and the relatively modest $2 increase.

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