Netflix CEO Reed Hastings confirmed in July that there will be a price increase for the company's popular streaming service some time in the next fiscal quarter, but promised that it wouldn't be a drastic increase. Bloomberg reports that the streaming service will be increased from $8.99 a month to $9.99 a month for new subscribers in the U.S., Canada and Latin America. Existing users will receive an undetermined grace period from the price hike, depending on what market you live in, but the increase will only affect the service's most popular plan.
The price increase will only affect the Netflix plan that allows two people to user the subscription at once, a.k.a. the "two-screen" plan. Prices for the one-screen and four-screen plans will remain unaffected at this time. The company currently has over 65 million subscribers around the world, a number that will certainly increase by year's end. They plan on completing their global expansion by the end of 2015, and they have already added Australia, New Zealand and Japan this year. The service is now available in more than 50 countries worldwide, with service starting in Spain, Portugal and Italy later this month.
Netflix has reportedly spent over $4.3 billion in programming costs over the next year, which will increase to $5 billion for the next three years. After launching its first original series in 2013, the critically-acclaimed House of Cards, Netflix has rapidly expanded their programming slate, adding hit shows such as Hemlock Grove, Orange Is the New Black, Arrested Development, Bojack Horseman, Unbreakable Kimmy Schmidt, Marvel's Daredevil, Bloodline, Sense8 and Narcos, just to name a few. The company also has a slew of upcoming shows such as Marvel's Jessica Jones, Marvel's Luke Cage, Marvel's Iron Fist and Fuller House.
The streaming service is also releasing a number of Netflix Original movies, such as the critically-acclaimed Beasts of No Nation, starring Idris Elba, which will be available for subscribers on October 16. Also debuting later this year is Adam Sandler's The Ridiculous Six, the first of four new Netflix movies, on December 11 and A Very Murray Christmas later in December. The company's aggressive programming approach is certainly the primary reason for the price increase.
The company suffered a huge blow back in 2011, when it jacked up the subscription price by 60%, while trying to split up its DVD-by-mail service which resulted in the loss of over 800,000 subscribers. Since then, there have been only modest price increases, and only one global hike in 2014. What do you think about this news? Is $9.99 too much for a month of Netflix streaming? Let us know what you think below, and stay tuned for more details.