from the check-your-credit-card-statement dept.
Your Netflix subscription is about to get pricier.
The popular streaming service announced that it will raise prices across its U.S. plans for new subscribers on Tuesday, and for existing users over the next three months.
Netflix's most popular plan, previously $10.99 a month for two HD streams, will rise to $12.99. The cheapest $7.99 non-HD plan will now be $8.99, while the premium option that allowed four simultaneous streams in 4K will rise to $15.99 per month from $13.99.
Netflix is raising the rates to fund its push into original programming. It was reported by The Economist last year that the company was spending between $12 billion and $13 billion on original programming in 2018, releasing popular films such as "Bird Box" and "Roma" as well as new seasons of TV shows like "13 Reasons Why," "Orange is the New Black" and "Marvel's Daredevil."
Related: Netflix Adds 5 Million Subscribers, Doubles Profit
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Video Streaming Services set for Cambrian Explosion
Netflix said Monday it added some five million new subscribers over the past three months as profits doubled, in a quarterly update that sent shares of the streaming video giant higher.
California-based Netflix ended the third quarter with more than 104 million paid subscribers, with international memberships hitting 52.7 million and overtaking the number of US subscribers.
Net profits meanwhile jumped to $129 million, more than double the figure from the same period a year ago for the video giant known for "House of Cards," "The Crown" and other original shows that are part of its library.
Revenues in the quarter rose 30 percent from a year ago to $2.98 billion, Netflix said.
"We are growing nicely across the world and are on track to exceed $11 billion in revenue in 2017," a letter to shareholders said.
Streaming has entered its profit-maximization period. For audiences, has the bliss point already been passed?
Netflix has continued to add millions of new subscribers, even after it raised prices:
Netflix Inc snagged 2 million more subscribers than Wall Street expected in the final three months of 2017, tripling profits at the online video service that is burning money on new programming to dominate internet television around the world.
The results drove Netflix to a market capitalization of more than $100 billion for the first time. Shares jumped 9 percent to over $248 in after-hours trading on Monday after rallying throughout the month and rising 53 percent last year.
The company has signed up more than half of all U.S. broadband households and is building its customer base in 190 countries by spending billions on programming.
Netflix picked up 6.36 million subscribers in international markets from October through December, when it released new seasons of critically acclaimed shows "Stranger Things" and "The Crown" as well as Will Smith action movie "Bright." That topped Wall Street expectations of 5.1 million, according to FactSet.
Along with 1.98 million customer additions in the United States, the company ended the year with 117.58 million streaming subscribers around the globe, despite a price hike in October.
From a Bloomberg op-ed: "The rapid pace of subscriber additions is impressive, but so is the amount of cash going up in flames."
If you watch streaming aggregators such as Netflix and Hulu you've likely noticed a decrease in the scope of their catalogs, with items of interest being added less frequently over time, and entire catalogs of content disappearing. New shows come out and don't ever make it to the service, or perhaps are only available through some add on service.
My favorite of all time was the "You need a cable subscription to watch this content, please log in with your cable provider", why even show us those?
This trend has been ramping up as providers try to build and market their own streaming services and restrict competition via content (or via adjustments to bandwidth for their streams)
And it is getting worse - "Netflix and chill no more—streaming is getting complicated" explores the trend.
Disney Plus is set to launch late next year with new Marvel and Star Wars programming, along with its library of animated and live-action movies and shows. It hasn't announced pricing yet, but Disney CEO Bob Iger said in an August call with analysts that it will likely be less than Netflix, which runs $8 to $14 a month, since its library will be smaller.
AT&T plans a three-tier offering from WarnerMedia, with a slate of new and library content centered around the existing HBO streaming app. No word on pricing yet.
Individual channels, such as Fox, ESPN, CBS and Showtime, are also getting into the act. Research group TDG predicts that every major TV network will launch a direct-to-consumer streaming service in the next five years.
Subscribing to service after service will quickly cost more than a cable bill, choice will be limited, finding shows more difficult, and multiple terrible interfaces (instead of one well known crummy interface). Much of the point of cord cutting will be dismantled.