Netflix Price Increases

Over the weekend Netflix announced that they are increasing subscription prices in the US. The company has incredible pricing power, meaning that every year or two they push through higher prices.

When Netflix started, their original price point was way too cheap, but they needed to convince people to sign up for the service. Now that the US market is considered 'mature', where growth rates have slowed and they have a loyal customer base, they can increase prices without significantly impacting subscriber numbers. What is an extra $1 or $2 a month anyway? You can't even get a breakfast bagel with that.

Netflix currently has 74 million North American customers. An extra $2 a month from each user results in additional profits of $148 million a month or $1.8 billion a year. What an amazing business! It is worth noting that the price hike currently only applies to new customers, and existing customers will gradually see the price increase come into effect.

Read more here - Netflix raises prices on all plans in US.