$2 Netflix Price Hike Starts in July

Netflix raises rates to cover costs for licensed content and Netflix originals

It’s finally happened. We knew the Netflix rate change was coming. They’ve been talking about it for months, but it is official. Effective July 18, 2016, some subscribers’ rates will go up $2 a month. The streaming video company explains it clearly in this email notice sent yesterday:

Subscription News: Netflix's $2 Price Hike Begins in July

Photo Credit: Screenshot of Netflix Email

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In a second email, also sent yesterday, Netflix explains that the standard plan (two screens at a time + HD viewing) will be $9.99, effective July 18, 2016. It directs users to their online accounts for additional information about their membership and to the Help Center for more information. Yet none of the links in the two emails direct subscribers to an explanation for the rate change or the terms.

While there are dozens of FAQs in the Netflix Help Center, we could find no mention of the pending price change in the questions. We searched for “price increase” and finally found a generic pricing page mentioning changes, but no information about this specific price hike.

“From time to time, Netflix plans and pricing may be adjusted as we add more TV shows and movies and respond to local currency changes. Some customers may be granted a price guarantee for a set length of time as a special thank you for their membership…”

Netflix goes on to explain that if a subscriber’s price is changing, they’ll receive an email about a month prior to the change. The current pricing change will not affect all members at the same time, but over time based on their billing periods.

We chatted with a customer service rep (Aileen) through the Live Chat feature in the Help Center to get answers to our questions. She answered our inquiry quickly, and she was friendly, but she said Netflix did not have a detailed article about the change.

Subscription News: Netflix's $2 Price Hike Begins in July

Photo Credit: Screenshot of Netflix Live Chat

During our chat with Aileen, she explained that the rate change was to help the over-the-top (OTT) TV service to provide content and to continue with Netflix Originals like Orange is the New Black, House of Cards, Grace and Frankie and other exclusive shows and movies. Aileen also told us that there aren’t any price guarantees at the moment.

“In case we increase the price, as we’ve done in the past, we would respect your price for a while, and any news we’d have about this we’ll notify you through email,” said Aileen.

Insider Take:

We understand the reason for price increases, particularly for services like Netflix who have increasing costs for licensing and content acquisition, and quite frankly, we think $9.99 a month for HD viewing and two screens at a time is completely reasonable. However, we don’t think Netflix has done a good job explaining what’s happening. The email is clear and transparent, but their website is not.

We encourage Netflix to provide more information on their website about the reason for the change and what type of price guarantee, if any, is being offered. Telling us that it is time for a price change isn’t enough. We want to know why we are being charged more and when the price could change again.

Without a rate guarantee, for example, it could happen at any time. Respecting our price for “a while” isn’t very informative.

We shouldn’t have to jump through hoops – or chat with a customer service rep – to find out why Netflix will charge us more. With so many competing streaming video services available now, companies like Netflix can set themselves apart through customer service and transparency. Aileen certainly did her part, but the company could save her the trouble by posting additional information about the changes on their website or blog, or both.

Subscription News: Netflix's $2 Price Hike Begins in July

Photo Credit: Netflix