Netflix subscribers are going to be paying just a little bit more for the privilege of binge-watching starting next month. Earlier this year it was revealed that the streaming service was set to raises their prices for U.S. customers and those price changes are going into effect in May. New customers have already been paying these higher prices, but pre-existing customers who were enjoying the service at its old, cheaper rate will have to shell out more very soon, or look elsewhere for content.
The new pricing model looks like this. Netflix's standard plan, which allows for two HD streams, is going up by $2 per month, increasing from $10.99 to $12.99. Their premium plan, meanwhile, which allows for up to four 4K Ultra HD streams, is also going up by $2 per month from $13.99 to $15.99. The basic plan, which offers just one non-HD stream, is going up for the first time ever, but only by $1 from $7.99 to $8.99 monthly.
So why the price hike? Netflix has been increasingly focused on creating their own, premium streaming content in recent years, whereas they initially started out by strictly licensing content from other studios. This has come at a hefty cost, as the company is investing billions in original movies and TV shows. Those costs are now being passed down to the consumer. It's estimated these increased subscription rates will bring in an additional $1 billion in revenue this year. It's also expected that most subscribers will stick with Netflix, as opposed to abandoning ship over an extra buck or two a month.
That said, at some point, something has to give. While many consumers have been cutting the cord as of late in favor of streaming, things are getting tricky. More and more streaming services are popping up with exclusive content. Once Disney+ launches this year, things are going to get even more complicated. While a dollar or two doesn't seem like much on its own, when one is paying for several streaming services, it begins to add up. Between Hulu, HBO, CBS All Access, Apple+ and niche services like Shudder or The Criterion Channel, people are going to be spending big bucks on streaming. At least Hulu comes free with Spotify Premium now.
Netflix, as it stands, is still far and away the leader in this section of the media business. They currently have 139 million subscribers globally, 58.5 million of which reside in the U.S. But they're going to be facing stiff competition from Disney+ and others in the coming months and years. Will consumers continue to see Netflix as a must-have monthly expense? Or will other services eventually make it so some difficult choices need to be made? For now, it's just $2 for most of us, but that may well add up to a lot in the long run. This news was previously reported by Variety.