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Netflix Says Price Hike Will Cover The Cost Of Offering Better Services

Netflix Says Price Hike Will Cover The Cost Of Offering Better Services

The online rental service says delivery charges and increasing expenses to acquire movie-streaming licenses are the reasons for its price hike.

Don Michael Acelar De Leon

In an attempt to cover the cost of its expensive DVD-rental business and push more customers to use its online movie-streaming services, Netflix is increasing the price of its bundled service, which includes both options, to $16 per month. Prior to this, Netflix was charging $10 per month for the same package. But according to Jessie Becker, vice president of marketing, that plan didn’t make sense financially or satisfy the customers who just want the DVD-rental service.

Netflix’s analysts hope that the price hike will make the company’s business more viable in the face of increasing expenses needed to cover postage fees for DVD-rentals via mail and the acquiring of streaming licenses for movies.

According to Netflix, its DVD-rental service via mail is at least 7 times more expensive to run.

Netflix

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