Netflix is gearing up to make a move that may not sit well with its subscribers.
On Monday, the Internet video service announced that the cost of monthly subscriptions would be going up within the next few months. They are estimating that the cost for new subscribers will increase by one to two dollars.
The nearly 36 million current subscribers need not worry … yet. The company has explained that the current cusomters will continue to pay the $8.00 monthly subscription cost, that has been implemented since 2010, at least for the next year.
The rising costs come as a measure for staying up-to-par with the competition. While Netflix currently has millions of subscribers, they are facing increased competition from cable networks such as HBO and Showtime, as well as other Internet video providers like Hulu.com and Amazon.com.
Netflix also needs the added income to help pay for the rising costs of licensing the many videos and series they provide, such as their original series House of Cards and Orange is the New Black.
“When we look at the shows and movies that we will be able to get if we have a bigger budget, it’s exciting,” Netflix CEO Reed Hastings told The Associated Press. “We want to make the service better and better so more people will join.”
Hastings’ welcomes the competition and admitted that he is a subscriber to Amazon Prime. He described their services as “complementary to Netflix.” “We’re building this ecosystem together that’s about Internet video,” Hastings explained. “The more players there are in Internet video, the bigger that ecosystem gets…. and we’re all participating in that transformation.”
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