Netflix Raising Prices Across Europe by €1, Calls Hike Necessary
Some European Netflix customers will soon pay more for their favorite subscription video-on-demand service. In a letter to subscribers, Netflix said it's raising the price for a standard subscription—which streams HD video to 2 devices—from €8.99 to €9.99 (about $1.10 USD). The price hike will only apply to new customers. Existing customers are guaranteed their current rate for 12 months.
Prices for a standard definition subscription (€7.99) and a premium subscription (€11.99) are staying the same.
In its letter, Netflix said it needs to raise prices to “continue providing good series and films."
Germany, France, and the Netherlands are included in the price rise. The U.K. and the Nordic countries were hit with a similar increase earlier in 2015.
Last month, Streaming Media Europe reported that Netflix had exceeded Wall Street expectations, and its success was largely due to strong growth oversees. In the second quarter of 2015, Netflix added 900,000 subscribers in the U.S., but 2.4 million in other countries. Netflix predicts that it will add 3.55 million subscribers in the third quarter.
“There’s definitely more room for them to grow on the continent,” said James Cordwell, an analyst at Atlantic Equities LLP, speaking to Bloomberg. “I don’t think the price increase will have a material impact on their growth trajectory given it’s still a relatively modest sum versus most other pay TV alternatives.”
While some pay TV operators have seen increased customer satisfaction with Netflix integration, others will likely face lower average revenues.
The SVOD company will begin operation in all three countries in late October, with subscriptions starting at €8 per month.
The SVOD leader grew by 3.3 million subscribers in the last quarter, with 2.4 million of those coming from oversees.