Current Netflix subscribers who pay $7.99 per month will get to keep that rate for at least the next year, Netflix CEO Reed Hastings said in an interview yesterday. However, new subscribers will pay whatever the new rate turns out to be when the Netflix unlimited streaming subscription goes up either $1 or $2 sometime before the month of July. News of the fee hike came with Netflix’s strong quarterly earnings report issued yesterday, which also revealed the service coming to cable DVRs in the US.
The increase in subscription fees follows Amazon’s raising of the Prime Instant Video service yearly fee that jumped to $99 from $79. However, the Prime subscription fee includes unlimited free two-day shipping on most items and free books through the Kindle lending library.
Both companies face increasing licensing costs for premium content from film and television studios, and competition from other online video services such as Hulu (co-owned by Fox, Comcast, and Disney), and networks like HBO and Showtime.