Netflix raises prices for new subscribers by $1

Video streaming service bumps its price to $9 per month

Existing subscribers get two-year reprieve

Netflix is raising its streaming prices by $1 per month for new customers, while giving current subscribers a two-year break from the higher rates.

The changes mean anyone signing up for Netflix’s video subscription service beginning Friday will pay $9 per month in Canada and the U.S. The old price of $8 per month will continue until May 2016 for Netflix’s existing subscribers.

The price increase, Netflix’s first in nearly three years, isn’t a surprise. The Los Gatos, California-based company disclosed its plans to raise its rates last month without specifying the precise amount.

Netflix says it needs more money so it can afford to pay for more original programming along the lines of its Emmy award-winning political drama House of Cards.

By delaying the price increase for current subscribers, Netflix hopes to avoid the backlash that it faced in 2011 when it raised its prices in the U.S. by as much as 60%.

The company lost about 800,000 customers within a few months in an exodus that alarmed investors, causing Netflix’s stock to plunge by more than 80 per cent in a year. Netflix eventually lured back subscribers and revived its customer growth, lifting its stock to record highs earlier this year.

Subscription prices will also be increasing by about $1 a month in Netflix’s markets outside North America. The company ended March with nearly 13 million international customers in more than 40 countries.

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