Netflix UK has raised its price to £6.99 per month for new members.
Netflix UK’s subscription fee has been £5.99 since its launch but announced plans last month to bump up the monthly charge – assuring current customers that their price would remain the same for two years.
Why are Netflix prices rising? The company is struggling somewhat financially, thanks to its aggressive expansion plans. Membership is expect to climb 50 per cent year-on-year in 2014, as they continue to target new territories. That growth in business is helped by a growth in original and exclusive content, from Orange Is the New Black Season 3 to a final six episodes of The Killing – and, of course, their ambitious Daredevil-led Marvel miniseries next year.
But in between setting up new markets and paying out for the titles needed to attract customers – House of Cards don’t come cheap, you know – Netflix’s coffers aren’t that healthy. Overall, Netflix enjoyed revenue of $1 billion in the first quarter of 2014. However, the planned move into new European countries this year will keep Netflix’s international arm running at a net loss.
A pound a month per new customer is hoped to be enough to boost their funds without deterring new and existing members. Indeed, they hiked prices in Ireland from €6.99 to €7.99 in January as a dry run, which they say had “limited impact” on business. Existing customers, though, were promised a two-year freeze in prices – a courtesy that is being extended to UK members too.
“In order to continue adding more films and TV programmes, we are increasing our price from £5.99 to £6.99 for new members,” the company announced in an email sent out to subscribers today.
“As a thank you for being a member of Netflix already, we guarantee that your plan and price will not change for two years.”
The added warning that this will only be the case “so long as you remain a member on your current plan” is a reminder that there is already a more expensive option available: an £8.99 per month subscription that lows you to watch content on four screens at one time.
Most of all, though, it’s telling that the email is accompanied by the announcement that “We’re always adding more TV programmes and films”, along with a list of releases, such as Homeland, Toy Story 3 and Only God Forgives – which will be added on Sunday 25th May. As always, the emphasis is on growth. For Netflix to keep doing so, a bigger service means a bigger price tag.