Sunday 21 December 2014

Irish Netflix users face second price increase this year, company confirms

Adrian Weckler, Technology Editor

Published 22/04/2014 | 18:10

Netflix is to raise its prices amid strong first-quarter results (AP)
Netflix is to raise its prices amid strong first-quarter results (AP)

Irish Netflix users face the prospect of being hit by two price rises this year, as the company has confirmed that new Irish users will not be spared a general price increase announced yesterday.

It had been hoped that because Ireland was used as a test country for a price increase in January, it would be spared any further subscription hike.

However, a spokesman for the movie-streaming company said that a second increase is "likely" to apply to new Irish users sometime in the coming months.

This means that there will be three different subscription fee levels for Irish Netflix users, depending on when the user joined. For pre-2014 subscribers, the rate stays at €7 per month until the end of 2015. For those who joined between January (when the rate rose to €8 per month for new users) and the next price increase, it will remain at €8 per month for the forseeable future.

However, new users from this summer are likely to face a subscription fee of €9 per month or thereabouts.

It is unclear whether a fourth tariff - €12 per month for those who want to view the service on four screens simultaneously - will also see a price rise.

Netflix is estimated to have at least 175,000 Irish users.

"As expected, we saw limited impact from our January price increase for new members in Ireland (from €6.99 to €7.99), which included grandfathering all existing members at €6.99 for two years," said an earnings statement from the company last night. "In the US we have greatly improved our content selection since we introduced our streaming plan in 2010 at $7.99 per month. Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only. Existing members would stay at current pricing (eg $7.99 in the US) for a generous time period."

The company said that the price increases were being implemented to "enable us to acquire more content and deliver an even better streaming experience".

Netflix currently faces price pressure on three fronts. As a company that wants more subscribers, it must pay to acquire more films and television programmes from studios. It must also acquire newer material that is usually only available to DVD-rental firms or premium subscription channels, such as Sky's movie channels.

The company also faces rising costs from making its own television series, including the political thriller 'House Of Cards' with Kevin Spacey and Robin Wright and the prison drama 'Orange Is The New Black'. This year, the company will broadcast several new original series.

Finally, Netflix is starting to face pressure from television and movie studios which believe they can extract higher fees for existing content.

The company added 4m new customers in the last three months, according to tonight's earnings statement. Of those, 1.75m were outside the US, primarily in Europe.

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