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Netflix to introduce price increase: New subcribers to start with

Chris Martin | April 23, 2014
Netflix has confirmed that it will increase its prices for new customers so it can invest in new content and service quality.

Netflix is planning to increase its subscription price in the next two months.

Despite a hugely successful first quarter, in which it reached 48 million subscribers at notched $1bn in revenue, Netflix is set to increase its prices.

"Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only," said the firm in a note to shareholders.

Although the price increase looks like it will only be for new subscribers, existing users will not escape forever. Netflix said in the note that users will stay at the same price for a 'generous time period'.

Netflix said that the extra money will enable it "to acquire more content and deliver an even better streaming experience". After all, original series like House of Cards and Hemlock Grove aren't free to make and Amazon is also going down that route making it a big rival.

New Netflix content

The firm noted that it expects momentum to continue throughout 2014 and into 2015 with additional kids series by DreamWorks Animation, a new original series called Marco Polo (a psychological thriller from the creators of Damages), Marvel's Daredevil, Sense 8 from the Wachowskis and Narcos, an action-drama series from Brazilian director Jos Padilha.

Netflix said: "We'll be investing more in marketing high-quality exclusive content, and spending less on direct response advertising such as banner ads touting free trials."

The change follows a successful price increase in Ireland which saw 'limited impact'. Introduced in January, it saw customers paying 7.99 per month instead of 6.99 and 'grandfathering' existing users at the same price for two years. Check out: Google Chromecast review: £30 dongle to rival Apple TV


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