Netflix said Monday (via the Wall Street Journal) that it would raise the monthly price for streaming subscribers by $1 or $2 and put the additional funds toward developing more original shows such as “House of Cards” and “Orange Is the New Black.” The company also said it has struck a deal to launch on TiVo set-tops and will seek partnerships with providers to appear.
CEO Reed Hastings and CFO David Wells wrote:
“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.”
Netflix has stated in the past that is has always planned on experimenting with implementing a number of pricing tiers. While they have been slow to do this, we can see evidence of it already with their $11.99 family plan; the standard streaming plan is still $7.99.
Do you think this is a smart movie by the company, and do you approve of the rate hike if it is used to continue to bring quality original programing to the service?
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