The streaming service has found that members don't mind paying a few more dollars for a more user-friendly experience.
Perhaps the biggest name in the streaming game is raising its prices.
The price increase has been made for the two most popular subscription plans, while the basic one remains unchanged. That plan allows for simultaneous streaming and HD viewing on two internet-connected devices such as an iPad and a Roku set-top box. Moreover, the premium tier subscription, which now costs $11.99 per month will go up to $13.99 per month. The spokesperson added that Netflix would begin to notify members of the change on October 19.
Analysts at Oppenheimer, KeyBanc Capital Markets, Wedbush and Jeffries increased their 12-month price targets for Netflix NFLX, +0.83% on Thursday. This is the first time the company has increased prices in two years, USA Today reported.
This hike in the prices of the subscriptions were expected for a while as the last price hike came in the November of 2015. The company is banking much of its future on original programming, and has said it will spend $6 billion in this year alone to acquire and produce original and exclusive programs.More news: Iowa State QB Park takes leave from team for medical reasons
The Standard Plan, which is the most common, will increase from $9.99 to $10.99 per month.
Wedbush's Michael Pachter, who is bearish on Netflix, said he doesn't expect the hike to push subscribers away, but thinks attracting new subscribers will be more hard and expects net adds to be down year-over-year in 2018. "I think that most subscribers consider the service a great value".
Amazon, Netflix and USA streaming service Hulu, are all reported to be working hard to discover and create the next "Game of Thrones" and secure the popularity of their business. Newcomer Amazon Prime is $8.25 per month while Hulu bottoms at $11.99 per month for commercial-free streaming.
In 2011, over 800,000 subscribers in the United States of America deserted the streaming service after it dramatically increased its fees. This made a lot of people ask whether or not this would effect T-Mobile's Netflix On Us promotion and, it doesn't. "Further, we expect less speculation this time as to what the price increase means for future content spending given 2018 has already been indicated at +$1b Y/Y", wrote Mitchelson in a research note.