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Netflix prices: Going up for new subscribers

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Netflix prices are going up for new customers. The Los Gatos, Ca. company announced that they will be increasing subscription costs for the first time in three years, but only for new subscribers. According to the Associated Press on April 22, 2014, that will amount to an additional $1 or $2.

Netflix is one of the largest streaming media companies in the world with over $4 billion in revenues and 2,000 employees in 2013. They boast over 33 million subscribers. They are now also producing their own content under the Netflix Originals banner. In January of this year the company was nominated for its first Academy Award for one of these shows.

Some of their original programming has made quite a splash with fans. Both "House of Cards," starring Hollywood heavyweight Kevin Spacey, and "Orange is the New Black" have been produced for 2 seasons. Buzz around both shows is highly positive and each are expected to continue.

Competition from the likes of Amazon Prime Instant Video, which is available to Amazon Prime subscribers is heating up. Reed Hastings, Netflix's CEO, said that he also subscribes to Prime and felt that the service was complimentary to his own. And other streaming services such as Hulu and HBO Go are real contenders competing for viewer’s eyeballs.

The increase in Netflix prices may only be $1 or $2, but with current subscribers only paying $7.99. that works out to a 10 or 20 percent raise. It sounds like existing customers will pay more sometime in the future as well. According to CNN on April 22, 2014, the increase will be used to pay for more original content.

In the most recent shareholders letter, the company also addresses the ongoing issue of "net neutrality," where all Internet traffic is supposed to be treated equally. So far Netflix has cut a deal with Internet Service Provider (ISP) Comcast to bolster their flagging streaming speeds for customers on the network.

What do you think about the Netflix prices story? Please drop in your comments below.

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