Netflix announces a price increase for subscribers…for the second time in under two years
Netflix earns $2.8 billion
Netflix was ready to pony up a huge cash offer for Warner Bros. when in competition with Paramount over the legacy studio. Since Paramount disrupted Netflix’s original agreement with WB, part of the deal for Paramount’s acquisition of the studio was to give Netflix $2.8 billion for a termination fee. While they didn’t gain the rights over Warners’ properties, the streaming giant walked away with their chin held high, stating, “We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”
After the deal had gone through, Netflix CFO Spence Neumann said at an investor conference earlier this month, “Now we move forward, and we move forward with $2.8 billion in our pocket that we didn’t have a few weeks ago.” So, how do they celebrate this bit of development?
Netflix announces another price increase
As Netflix walked away with a big chunk of change from Paramount, they also pledged, “This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering.” According to Variety, Netflix has now increased their prices on all three of their service plans. The update in prices has been applied to their website, where Standard With Ads plan will now cost $8.99/month, up $1 from $7.99 previously. The Standard plan (no ads, viewing on up to two devices simultaneously) is rising by $2, from $17.99/month to $19.99/month. And the Premium plan (no ads, streaming on up to four devices at once, Ultra HD and HDR) is likewise going up $2 — from $24.99/month to $26.99/month.
Netflix made a statement to Variety that said,
Our approach remains the same: We continue offering a range of prices and plans to meet a variety of needs, and as we deliver more value to our members we are updating our prices to enable us to reinvest in quality entertainment and improve their experience by updating our prices.”
The price increase was implemented yesterday. It applies to new customers and the necessary changes have been instituted for existing customers.
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