Netflix is increasing its monthly fee for streaming movies and television shows from £5.99 to £6.99, hoping that the "House of Cards effect" will keep subscribers from deserting to the rival Amazon/Lovefilm service. The price increase will take effect immediately for new subscribers but will be delayed for two years for existing members. Netflix will allow subscribers to continue paying £5.99 a month if they opt for a lower-resolution "SD" quality service. It also has a multiple-users service for £8.99 a month which allows four users to view programmes at the same time on a single monthly account. In an email to subscribers this morning, Netflix said: "In orderto continue adding more films and TV programmes, we are increasing our price from £5.99 to £6.99 for new members. As a thank you for being a member of Netflix already, we guarantee that your plan and price will not change for two years." Netflix is raising prices not just in the UK but almost across the board for its 48 million global subscribers.
My opinion:
I think that Netflix are taking a very big risk in increasing the price, as they could not attract new customers and maybe loose their old customers. Even though in the email they said they for the existing customers they are not rising the price for another two years, i think it could still affect the current customers because they might not like this decisions as they will call themselves loyal customers for choosing netflix. I think this is a very big step which they are taking and it could be beneficial or it could affect the business very badly. They will also be benefiting from it as they will then receive £6.99 where they use to receive £5.99.
I think this could also change the mind of people who were thinking Netflix as they might want to find someone cheaper than netflix. This means Netflix will not be getting extra customers or attracting new customers because they have increased their prices and i think customers will always like to save money which means they are likely to change sources and move to something like LoveFilm, which i think to attract customers they offer a first three month free trail, where as netflix only offer one month free trail.
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