Netflix, the world’s most popular subscription video service, isn’t just introducing new shows and movies with the Fall. Effectively immediately, there’s a Netflix price change happening that could endanger Netflix’s reputation with users who want to ditch cable and satellite.
Netflix confirmed to Bloomberg Business this morning that it does indeed plan on making changes to its pricing structure in the United States, Canada and Latin America. Rumors of a Netflix price change first circulated earlier this week. This Netflix price change is the second time that Netflix has altered pricing for its plans. Any change that Netflix makes to its pricing affects the streaming video market in a big way. A new Sandvine report indicates that Netflix now accounts for 31 percent of all download traffic on the internet in North America, according to The Guardian.
It’s the Standard Plan that’s at the heart of today’s changes. Streaming Netflix content to two different devices at once now costs users $9.99 in North America. That’s up $1 from the amount of money users paid for the same plane before. It’s this plan that unlocks high-definition video streams to devices that support it.
An upgraded plan chart on Netflix’s website says that the company will still charge $7.99 for users who’d like to stream video to a single device at a time. Netflix also hasn’t changed the cost of its premium plan, leaving it at $11.99 for users who want to stream Netflix content to four different devices at the same time. The Premium subscription for $11.99 is still the only way for users to get Ultra HD content. All other standards of Netflix’s approach, like letting users cancel their plan at any time, hasn’t changed.
Even at $9.99 for two streams Netflix is a bargain when compared to rivals. Many like to think of Netflix as an alternative to Hulu Plus or Amazon Prime, but Netflix has grown past that. In reality, the service is now in direct competition with cable companies like Comcast, AT&T and Verizon. Each of these companies have some sort of on-demand video service for their customers. Comcast has taken their war with Netflix to a new level, letting users stream on-demand content to their mobile devices and introducing an app that lets users stream cable channels live on an iPhone, iPad or web browser.
There isn’t a statement from the company revealing the motives behind the Netflix price change, but the consensus suggests that Netflix is trying to build-up funds to keep financing its content library. Netflix has made some pretty high-profile deals with content makers over the years. Content makers know that they’re television shows and movies are the key to Netflix’s success. They want top dollar for everything they put on the service.
Netflix is building out its library and taking the spotlight off other’s programming with content of its own. In September big hits like Jane The Virgin and Zoo launched on the service. The company also confirmed that it was spending even more on original content in the near future. It picked up British television sensation Black Mirror for twelve episode season – more than the show received in its first two seasons on traditional television. The service confirmed it was producing a new children’s television show called The New Mr. Peabody & Sherman Show on August 6th. Netflix is in the midst of spreading across the world. New Zealand, Japan and Australia all picked up Netflix services this year.
This Netflix price change shouldn’t have a very large impact on the lives of users already signed up for the service. Netflix says users who have the standard plan already won’t notice any changes at all in how much they pay for now. Bloomberg reports that the price change will come to even users who’ve already signed up for the service at some point, but doesn’t elaborate on that further. Netflix’s own site doesn’t mention a grace period at all.