22 June 2016, USA :
As many as half a million Netflix subscribers may bail on the streaming service after the No. 1 subscription video service raises prices for long-term customers over the course this year.
This could result in the streaming company losing about $520 million in additional annual revenue for Netflix. While the company is going global by investing more and more in original series and films, the investment needs to be coming from somewhere and Netflix is bringing that money from the subscribers.
The price increase will change existing subscribers’ monthly fees from $7.99 to $9.99, with the option to downgrade to a single-stream SD plan for the same $7.99 price.
Additionally, due to a grandfathering system, those who signed up for the HD plan after May 2014 (when the price was increased from $7.99 to $8.99) will only see a $1 increase to even out their subscription fee with the others.
Analyst Anthony DiClemente said, “We note that this has long been a tenet of our investment thesis on the domestic business, as slowing subscriber trends are more than offset by increased monetization.”
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