Video streaming service raises standard plan by one dollar per month for new subscribers.
The streaming service reported in July it has more than 65 million subscribers globally, and the new increases could generate an additional $800 million per year.
The company says it expects to spend around $5 billion on acquisitions of films and TV content within the next year, and experts are predicting that will increase to over $6 billion by 2018.
The company announced at the end of August it would not renew its agreement in the United States with Epix, the cable network, with the deal expiring at the end of September. This resulted in some rather high-profile movies no longer being available on the service.
The company said at the time they planned to use original programming and innovating licensing agreements with some movie studios to make a more enjoyable viewing experience for its customers.
They have also said that beginning in 2016, Netflix will be the exclusive pay-tv provider for films from the Walt Disney Company, which includes Pixar, Lucasfilm and Marvel movies. The company also added this programming will be seen on Netflix faster that previous arrangements had allowed.
Netflix’s pricing movements have not escaped the vision of Wall Street investors and analysts. Last year, after the company announced the previous price increase, investors were cautious when Netflix said the United States subscriber growth had slowed down in the third quarter and blamed the price increase. Later the company said they thought the slow growth would have occurred even without the increase, and called the downturn a “natural progression.” Shares of Netflix stock have taken off this year.
Youssef Squali, and analyst at Cantor Fitzgerald, said investors should not expect Netflix’s price hike in Europe to have a negative impact on the company’s customer retention or in the acquisition of programming. In a research note released in September, Squali said the move to raise its subscriber rates implied “strong adoption of the service” in the areas that were included.
Netflix Chief Executive Reed Hastings, during Netflix’s second-quarter earnings call in July, said, “We’re going to continue to have incentives for people to move up in the plans as suits their usage pattern, but we want to take it very slow. Over the next decade, I think we will be able to have more and more content and add more value, and then be able to price that appropriately.”