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Netflix's Price Hike: 4 Key Questions Answered

Users are sad, investors are thrilled, and there are plenty of questions to ask. How much is Netflix going to make from this price increase? How is this going to affect the streaming space? And why is this happening right now? How much is the price hike worth? Netflix doesn't break down how many subscribers have each type of subscription, but if we say each accounts for a third of the total, we get $97.5 million in new cash every month from this price hike. A Parks Associates study last year pegged the portion of premium subscribers (also a $2 price increase) at 30% and the basic plan (a $1 increase) at 27%, so it's safe to say that my back-of-the-envelope math is conservative. There will be even more extra cash from price hikes in select foreign markets, though Netflix is not raising prices everywhere. And the price increase will bring in even more as more people sign up for Netflix service.

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