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Netflix will increase subscription prices

Netflix will increase subscription prices
Photo by Jason Merritt/Getty Images

Netflix will increase subscription prices for the first time in three years as competition among Netflix, Amazon and Hulu for viewers of Internet video gets fiercer. Netflix is raising its subscription fees to pay for more original video programming like “Orange is the New Black” and “House of Cards,” according to an April 22 report in the Associated Press via Fox News.

Unlike the price increase three years ago, when Netflix lost 800,000 subscribers because of a consumer backlash against a poorly managed price increase announcement, Netflix is handling this subscription increase much more gingerly. The $7.99 monthly Netflix subscription price will increase by just $1.00 or $2.00 a month starting in July for new subscribers only.

After a still-undefined grace period, a new subscription price will eventually rise for all subscribers. Earlier this year when Netflix raised its subscription price in Ireland, for example, the price went up for new subscribers only. Current subscribers in Ireland were guaranteed the current rate for two years.

Netflix is the leading Internet video subscription service that lets users watch unlimited television shows and movies for one monthly subscription price on an iPad, iPhone, iPod Touch or Android device. Consumers can download the free “Netflix” app for iPhone, iPad or iPod Touch at the App Store.

Competition is fierce on the Internet video viewing arena and Netflix is counting on exclusive content like the popular “House of Cards” or “Orange is the New Black” to ward off competitors, Amazon and Hulu—as well as Microsoft and Yahoo.

Amazon offers a service called “Instant Video” that offers unlimited viewing of more than 40,000 titles. Unlike Netflix that is specifically a video streaming service, Amazon offers “Instant Video” as an extra benefit to customers who subscribe to Amazon Prime. Amazon Prime customers get free two-day delivery when purchasing almost any item from Amazon. Amazon has a dedicated “Amazon Instant Video” app for watching movies and videos, which can be downloaded for free at the App Store.

Earlier this month Amazon raised the annual Amazon Prime subscription from $79.00 to $99.00 or $8.25 a month. Amazon is slowly moving into producing original shows like Netflix, although Amazon is off to a rocky start, according to Gizmodo.

Meanwhile, Microsoft is moving into Internet video original programming with more than six original series in production and even more in development for Xbox Entertainment Studios. To distinguish Microsoft's offerings from those of Netflix and Amazon, Microsoft will offer ways to interact with these shows, starting in June.

Yahoo plans on offering 10-episode half-hour original comedies to supplant the original online content that Yahoo currently offers. Recently Yahoo debuted “Yahoo News” with Katie Couric and a new Yahoo technology site with David Pogue.

Hulu Plus and Netflix are considered to offer equivalent quality video streaming services. Whereas Netflix offers original shows like “House of Cards," Hulu is known for its exclusive British and Canadian television shows. The monthly Hulu and Netflix subscription prices are the same.