Netflix predicts 400,000 people will cancel their subscriptions as it plans to hike prices by up to £36 a year
- Warns up to 8 per cent of customers could be forced to turn away from the site
- Will increase the cost of its premium plan by £3 a month to cover rising costs
- Says the extra income will be used to help create more original content
Netflix is warning its customers that its prices will soon increase – and the streaming giant is prepared to risk losing some subscribers.
It says subscribers will fall by 8 per cent down to five million people – a loss of 400,000 from this time last year.
The price hike could come as a monthly bump of £3 ($3) to customers of the premium plan and will affect people in the US, Brazil, Mexico and some parts of Europe – including the UK.
It warns that up to eight per cent of its customers could be forced to turn away from the site in protest.
Rising costs are said to be as a result of covering the expenditure Netflix is pumping into producing its own original content.
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Netflix Inc, the world’s dominant streaming service,is set to increase the cost of its monthly premium plan by £3 a month to cover the cost of its original content production (file photo)
Netflix confirmed it is testing higher prices for its plans last month with the people seeing prices of £10.99, £11.99 and £12.99 for the monthly subscription.
Current prices are £5.99 for the basic package, £7.99 ($10.99) for standard and £9.99 ($12.99) for premium.
The suggested prices suggest that users could be charged anywhere up to an additional £3 ($3) a month, or up to £36 ($36) a year.
Netflix expects to slow in the next few months as prices put off would-be customers.
It comes after announcements from both Apple and Disney that they are entering the arena with Netflix and launching their own streaming services.
For $6.99 (£5.36) a month, Disney subscribers will have access to a library of movies and films spanning five categories; Disney, Pixar, Marvel, Star Wars and National Geographic.
The family-friendly service will also include Fox films such as The Sound of Music and Malcolm in the Middle following the sale of 20th Century Fox to Walt Disney.
Apple has not yet said how much its service will cost or when exactly it will launch.
Netflix, however, appears to not be worried about this tumultuous time.
It said in a statement: ‘We don’t anticipate that these new entrants will materially affect our growth.’
Netflix experienced said that for the start of 2019 and in the first three months it increased its profits to $344million (£263.5million) – with sales up 22 per cent.
HOW DO ALL THE STREAMING SERVICES COMPARE?
Price: $6.99 a month
Movies: Disney, Pixar, Star Wars, Marvel, family friendly 20th Century Fox movies.
The service has not announced how many films in total it expects to have when it launches.
TV shows: Every episode of The Simpsons, Malcolm in the Middle and others
Original content: 25 series and 10 films
Price: 8.99-$15.99 a month
Original content: House of Cards, Orange is the New Block, Stranger Things, Narcos and hundreds more
Price: $8.99, $11.99 ad free
Original content: The Handmaid’s Tale is by far its standout
Price: $8.99 or $12.99 for Prime membership
Movies: 12,764 movies
Original content: The Marvelous Mrs. Maisel, Bosch, Goliath among others
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