Netflix Raises Monthly Subscription Fee

netflix

The popular streaming company Netflix has raised their monthly subscription fee from a  previous $7.99 a month to $8.99 a month.

The newly instated membership fee will reportedly not affect long-term members, whose rate will remain the aforementioned original price for the next two years. The new fee of $8.99 a month is only applicable to newly registered members of the company.

The hike in membership price has certified Netflix as more expensive than its reigning competitors, including that of the recently established Amazon Prime Instant Video (which sits at a yearly estimate of betwen $95.88 to $107.88) and Hulu Plus ($95.88 a year). This shift in financial hierarchy has yet to be determined as either a success or failure for the company’s reputation.

Netflix, established in 1997, gives those who are reluctant to pay for cable television subscription access to instant streaming of their favorite shows and movies (commercial free, of course) for a low price and orchestrated on a variety of platforms. The company’s services can be streamed through computers, smartphones, tablets and various gaming consoles.

When examining the question of why the company has recently decided to raise its monthly subscription fee, there are several possible explanations as to why the wildly popular streaming service is charging its devoted audience a higher fee.

Payment options regarding the monthly subscription were previously more diverse than they have been of late; as of last year, Netflix put a ban on prepaid credit cards being used as a method of fee settlement. This decision undoubtedly reduced the numbers of subscribers to the company, as not everyone is in possession of a legitimate credit card or has a functioning PayPal account. This change in administrative policy is quite possibly a sign pointing towards the reasoning behind the recently raised monthly subscription fee.

It has also been alleged that the corporation’s business has been experiencing detrimental outcomes from its deal with the cable company Comcast. It has been reported that Comcast has been negatively affecting the user experience of Netflix as a way of extorting the latter company into a monetary related deal that the former deems acceptable. This power struggle is yet another probable explanation as to why the company has raised its monthly subscription fee to the public.

Whether or not this recent adjustment will prevent the company from obtaining more subscribers to the ever-growing streaming service is a predicament that has yet to be determined. Although this is not the first time that the company has raised the monthly fee for subscription (in the previous month those in Ireland were requested to raise their monthly payment by one euro, roughly the same equivalent to the amount in question, a decision that showed no distinct diminishing sales rate), it cannot be determined as of yet whether or not Netflix will suffer because of this financial decision.

The ultimate aftermath relies upon whether or not potential Netflix subscribers choose to initiate membership with the company upon learning of their recently raised fee. It remains to be seen if the newly raised monthly subscription fee proves to be too much for the potential newcomers to the corporation.

by Rebecca Grace

Sources:

Tom’s Guide
CNET
USA Today

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