Netflix to raise subscription prices this year

Netflix reveals profits of $53 million (£32 million) for the first quarter of 2014 and plans to increase subscription prices.

Stream-on-demand service Netflix has confirmed plans to increase subscription prices.

In the first quarter of 2014 it generated revenues of over $1 billion, with profits standing at $53 million (£32 million) for the same period.

In a letter to shareholders, CEO Reed Hastings and CFO David Wells stated that the US streaming services grew by 2.25 million net members, to reach 25.7 million, while international membership grew by 1.75 million, reaching a total of 12.7 million members. The letter also floated the idea of raising the price of subscriptions by a “one or two dollar increase, depending on the country, later this quarter for new members only”.

What if I'm already a Netflix customer?

Netflix says existing customers will have their subscriptions ‘grandfathered’, meaning that the pricing structure will stay at the current rate for a “generous time period”. In the UK at the moment, the price of a Netflix subscription is £5.99 per month. In January, Netflix raised prices in Ireland from €6.99 to €7.99 per month, grandfathering in all existing members at the lower rate of €6.99 for two years, which could perhaps give an idea of the length of future grandfathering periods.

Netflix has found success with its original programming such as House of Cards starring Kevin Spacey and will stream the Breaking Bad spin off series Better Call Saul after its season finale airs on AMC. It also offers the original hit show for streaming.

Netflix has been rated as second only to HBO when it comes to offering original programming, something Hastings and Wells were keen to highlight in their letter:

“To have achieved this recognition in our second year of original content creation is exciting and we are optimistic about building on our initial success.”

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How much do streaming services cost?

Netflix is not the only streaming service out there, though. Here's a quick breakdown of the prices:

Now TV is owned by Sky, and gives viewers three options. You can pay £9.99 for a pass which will give you unlimited access in a single 24-hour period to six Sky Sports channels. A Sky Movies pass can be obtained for £8.99 until 29th May, and £9.99 thereafter. This allows you to stream all the Sky Movies channels, and watch movies in the rotation on those channels on demand, for a month. Finally, the entertainment pass costs £4.99 a month until 29th May, and £6.99 after that date.This gives you a month's access to Sky channels not available on Freeview, including Sky 1, Comedy Central, Discovery Channel and Sky Atlantic.

A subscription to Amazon Instant Video is priced at £5.99 per month, but Amazon Prime account holders also have access to this service. The annual cost is £79, which works out at £6.58 a month, or 59p more than just the standalone video service, though this must be paid upfront as a lump sum. However, an Amazon Prime account also gets you free one-day delivery on over seven million items and the ability to borrow over half a million Kindle titles.

blinkbox titles range in price, but to give a popular example, you can buy series one of Game of Thrones for £17.99 in standard definition, or £23.99 if you opt for the HD version. Play's Wuaki matches those prices. From either service, renting a title lets you watch it within 30 days of payment. Buying films will store them permanently in your library. Because blinkbox is affiliated with Tesco, you also have the opportunity to collect a Clubcard point for every pound you spend.

Tesco's Clubcard TV still has a very limited range of movies and TV shows on offer, but is completely free. All you need to use the service is a Tesco Clubcard, which can applied for in-store or online. 

Knowhow Movies is another pay-per-title service which rents and sells movies and TV shows. Films are around £13 to buy, or £4 to rent, though like blinkbox and Wuaki, you will pay more for HD quality.

Are you a Netflix customer? Do you think it offers good value for money? Are other streaming services superior? Let us know your thoughts in the comments box below.

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