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Netflix’s expected price increase has arrived.
The streaming media company will now charge new members $8.99 a month for access to its library of on-demand movies and TV shows, but current members are exempt from the price hike for at least two years.
“As a thank you for being a member of Netflix already, we guarantee that your plan and price will not change for two years,” reads an email the company sent to subscribers Friday.
Membership costs are rising across the pond, too: Folks in the U.K. and other parts of Europe can expect £1 and €1 increases, bringing the costs of a monthly membership to £6.99 and €8.99 respectively.
Netflix chief executive Reed Hastings hinted at a price increase during the company’s first quarter earnings webcast last month.
“If we want to continue to expand,” he said, “we have to eventually increase prices a little bit.”
Netflix last raised its membership prices in 2011, when the company split its streaming and DVD service into separate packages. That didn’t go over too well with subscribers or shareholders, who left the service in droves and watched the stock plummet.
The company has learned from that mistake, edging the price up much more delicately this time around. Most of the added revenue will go toward the company’s content budget, according to Hastings.
Netflix’s stock has been pretty flat this morning. It’s down a smidgen (-0.74%) at the time of publication.
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