During May of 2014, Netflix started to increase the price of its standard plan for streaming for any new subscribers. At first, the price increased to $8.99 per month, and then last October they increased it again to $9.99 per month.
Netflix existing subscribers were grandfathered in for $7.99 per month for the two-stream quality HD plan. However, those less expensive days will be over soon.
Next month, those customers grandfathered in will be moved to $9.99 per month for their standard plan. Industry analysts estimated that the change in monthly rates would affect close to 37% of the subscribers in the U.S. or approximately 17 million people.
In addition, the majority of the 17 million monthly subscribers are not even aware that the change is coming. In a survey recently carried out by JPMorgan almost 80% of those who in May will become un-grandfathered, did not know the price increase was on the way.
The big question on the minds of many is how those 17 million subscribers will react when the increase takes place. It has been estimated by analysts that between 3% and 4% of those affected will cancel, though some believe that number could increase to over 5%.
Despite the increase in prices, Netflix still has the lead in per hour price of entertainment on pay TV. Netflix cost 9 cents per hour of viewing while a typical package for pay-TV costs 30 cents per hour, according to analysts.
Netflix has been expanding at an incredible rate internationally for the past few years. Domestically, the increase has been far less due to saturation and the number of other streaming options available.