The Netflix price increase for the “Euro Zone” may foreshadow U.S. increases next year!
Last month it was announced that Netflix was planning to increase U.S. subscriber pricing. While many may be wondering what that price increase may be, it turns out that recent price increase in Europe, may provide some details on what to expect. According to Variety, the price increase was minimal averaging at around a 10% increase from their previous subscriber costs.
Previously priced at €8.99 ($9.9) a month, from Monday Aug. 17 Netflix’s two-stream HD plan is now being sold at €9.90 ($10.9) in the Euro Zone where Netflix now operates, for example, in France, Germany and Netherlands. In affluent – and pricey – Switzerland, this service will now cost CHF 14.90 ($15.2), up from CHF 12.90 ($13.2).
The price increase is said to be due to ongoing original content that is being generated for the region. While this kind of justification is valid, it also shows that the United States is a bit overdue for a Netflix price increase. We’ve seen a multitude of “Netflix Originals” come through for years and while we did see a price increase years ago, Netflix has greatly evolved since then.
The lesson to be learned from this European price increase is that it was a small increase to accommodate for the added programming value. Original content costs money and many of us have known that a Netflix price increase has been inevitable. U.S. subscribers are currently paying $7.99 a month for the streaming only service. With over 60 million subscribers in the United States alone, I’m guessing that the price point of $9.99 for streaming only will be what the USA is looking at in 2016. While prices could be higher, keeping things under $10 is optimal for keeping hostility low and still making a substantial profit from the high number of subscribers. I could be wrong but based on the Euro Zone increase and number of U.S. subscribers, I think Netflix will keep USA monthly subscriptions under $10.