For several years, subscribers have been enjoying Netflix shows for $7.99 a month, which is a great deal especially with all the new seasons of hit shows coming out this month. But all good things eventually come to an end.
On Wednesday, Netflix CEO Reed Hastings told investors in a meeting that the company is preparing for a price increase. Current subscribers won't see the price increase this quarter, but according to The Guardian, prices will increase over the next decade.
"We want to take it very slow. Over the next decade I think we'll be able to add more content and have more value and then price that appropriately," Hastings said.
Another change that Netflix will be implementing in the future is the crackdown on the password sharing practice that most subscribers have been doing. Though most people commonly share their Netflix subscription with family and friends, Netflix is gearing up to motivate subscribers to level up to the two-stream, high-definition and ultra-definition services, instead of happily settling for the one-stream, standard-definition package.
The company is reported to have 65.6 million subscriptions worldwide with the cost of third-party content on the service 4.6 times its net revenue of $7.7 billion, and perhaps this is the reason why Netflix needs to increase its prices.
Hastings also shared some details regarding the company's plans to enter the challenging markets of China and Japan. During the meeting, Hastings expressed his hope of getting Comcast to provide free peering to Netflix in the coming months.
In reference to its upcoming plans to extend services in these two tightly locked markets, Hastings said, "We described it as a modest investment when we launch, and nothing has changed in terms of our use of the word 'modest' with reference to investment levels."
Netflix made an impressive $838 million this month alone on streaming service revenues and a good chunk of it comes from its international web video service, which raked in $307 million. With numbers like these, the company is well on its way to remain an industry titan.
Photo: Marit & Toomas Hinnosaar | Flickr
