Netflix pushed ahead with its expected price increase on Friday, announcing that its flagship $7.99 per month streaming plan will increased to $8.99 for all new subscribers.
Netflix, perhaps looking to avoid the sort of subscriber exodus it experienced in 2011 when it raised prices and briefly tried out an ill-fated DVD-only subscription service called Qwikster, also announced the current members will keep their current price for two years.
The increase was on the low end of the anticipated range. Last month, Netflix, which ended the first quarter with nearly 48.35 million streaming subs worldwide, said it would raise the monthly price for new subs by $1 to $2 per month.
Also on Friday, Netflix introduced a new $7.99 plan that provides access only to standard-definition streams and limits streaming to one screen at a time. Its primary tier offers SD and HD streams (and access to a small library of titles in the Ultra HD/4K format) and lets subs stream on two screams at the same time. Netflix had been testing a $6.99 per month SD-only, single-stream offering.
Netflix’s high-end, family-oriented tier runs $11.99 per month and lets those subs stream to as many as four screens at a time in HD and SD.
Investors viewed the limited Netflix price increase in a positive light, as Netflix shares closed up $6.89 (2.14%) to $328.55 each Friday.
A recent survey of 1,000 consumers conducted by Simon-Kucher & Partners found that 58% of current Netflix subs said they would pay more than the current price.
