Netflix price hike on the way

Sections: Streaming, Video

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Netflix signNetflix, in a letter to shareholders, detailed their intent to raise the price of streaming “one or two dollars” in the next few months for new Netflix customers. Though existing subscribers will be shown a “generous grace period” before likewise stepping up to the new system.

We continue to see more capable Internet television devices launched. Chromecast, Roku Streaming Stick, and Amazon Fire TV (on which we expect to support voice search later this year) push the quality of experience and price points for adapter products. Smart TVs from manufacturers like Sony, Samsung, LG and Vizio are starting to evolve from Internet TV as a “bolt-on” to Internet TV as a critical and integrated part of the overall device interface. Roku TV will likely be available in the Fall as one of the first Internet-centric TVs. We expect this trend to continually decrease the friction required for our members to access Netflix and enjoy great content.

As expected, we saw limited impact from our January price increase for new members in Ireland (from €6.99 to €7.99), which included grandfathering all existing members at €6.99 for two years. In the U.S. we have greatly improved our content selection since we introduced our streaming plan in 2010 at $7.99 per month. Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only. Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period. These changes will enable us to acquire more content and deliver an even better streaming experience.

With undisclosed amounts being paid to Comcast, and likely Verizon, Time Warner, and other major ISPs in the near future, it comes as no surprise. The letter goes on to detail how the proposed Comcast/Time Warner merger will stifle competition, and enable them to suck even higher peering fees from streaming, and other services that use large amounts of bandwidth.

Via:[Shareholder Letter]

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