Netflix announces price increase
Netflix announced Thursday that it will raise its prices again, this time by $1 to $9.99 a month, giving the streaming video service more money to develop original content.
The price increase will take effect on Nov. 11 for new customers. Existing customers will continue to pay the current rate, $8.99 a month, until October 2016. Longtime customers who still pay $7.99 a month will hold onto that rate until at least May 2016.
The change may reflect that it is getting more expensive for Netflix and other video distributors to secure deals for television and movie content. In August, Netflix announced it would not renew a deal with cable network Epix, costing U.S. subscribers access to some high-profile movies including “The Hunger Games: Catching Fire,” “World War Z” and “Transformers: Age of Extinction.” Rival Hulu quickly swooped in to make a deal of its own with Epix.
The price hike will allow the company to offer more original content, said company spokesman Anne Marie Squeo. This year alone, Netflix introduced more than two dozen new series or films, including “Narcos,” a popular crime drama focusing on the life of Pablo Escobar and his Medellin drug cartel.
Even as Netflix has surged past 65 million users globally, the firm faces pressure from other new streaming video apps including Dish's SlingTV, HBO Now and even offerings from Verizon and Comcast. Some of these apps are priced at upward of $15 per month, which could also help explain the gradual rise in Netflix's own prices. But Netflix is still king when it comes to the number of subscribers.
The company's stock jumped more than 2 percent after the announcement, trading at about $110 a share.