Netflix, television streaming giant will raise its price as much as $2.00 a month for new members. Existing customers, who utilize the $7.99 all-you-can-watch plan will keep the same rate for a “generous time period”, according to the company.
“If we want to continue to expand to do more great programming, we have to eventually increase prices a little bit,” said Netflix CEO Reed Hastings. In an effort to provide more original programming such as House of Cards and Orange Is The New Black, a slight increase in rates seemed inevitable.
This is the first price hike for the company in four years. In 2011, the company took a hit by attempting to raise prices without notice.
After a disastrous PR ordeal, the company lost over 800,000 customers and its stock prices plummeted 80%. This time around, Netflix executives will take a slower approach to educate consumers on why the increase is necessary and how it’s beneficial.
The company made over $2.7 million dollars in the first quarter, but has experienced a less than stellar second quarter.
The online streaming industry has become more competitive in recent years with Hulu, HBO Go, and Amazon’s Prime Instant Video. When questioned about competitors, Hastings described other services as “complimentary to Netflix.”