Netflix CEO Warns that a Price Increase is Coming in the Future

[dgstorm]

Most of the time, the news we get to report is pretty cool. Unfortunately, sometimes we "get" to report the bad news too. Today we are faced with that task again. Without giving any specifics, Netflix' CEO Reed Hastings announced to investors that the company plans to "carefully push" consumers toward a higher price model in the coming years.

This is executive parlance for "we are going to raise prices." Here's a quote with more of the details,

Netflix may be less tolerant of widespread password sharing in the near future. The company has a one-stream, standard-definition package priced at $7.99 a month, but “we also want to motivate people to move up to the two-stream and the high-def and the ultra-high-def”, Hastings said, though he didn’t elaborate on what the incentives to switch plans would be.

Prices of current subscriptions won’t change this quarter, but Hastings said prices will increase over the next decade.

“We want to take it very slow,” Hastings said. “Over the next decade I think we’ll be able to add more content and have more value and then price that appropriately.”

Hmmm... whether consumers take kindly to these eventual price increases depends on how large they will be. Netflix has been creating some solid unique content lately, and they plan to spend $1 Billion or more on new shows next year, so perhaps it will be worth it. It also sounds like they will roll out these higher prices a very slow rate, so perhaps it won't be too bad. Discuss your point of view.

Source: The Guardian