Netflix Price Going Up; Amazon Acquires HBO Content

Popular video streaming service Netflix has announced plans to raise its monthly service price. Meanwhile, Amazon says it has acquired the rights to HBO (Home Box Office) shows for its Amazon Prime streaming service.

For the past three years, Netflix has offered its video streaming services to customers for $7.99 per month -- an affordable price that has helped Netflix generate revenue of $1 billion. Netflix's total profits for the first quarter of 2014 are an estimated $53 million. (Source: bbc.com)

Premium Content Means Higher Prices, Netflix Says

Netflix chief executive officer Reed Hastings says the charge of $7.99 a month is no longer fair, particularly as the company continues to develop its own premium shows, like "Orange is the New Black" and "House of Cards", which stars Hollywood mainstay Kevin Spacey.

"If we want to continue to expand [our programming] ... we have to eventually increase prices a little bit," Reed said.

The price jump won't be too onerous for Netflix users; the price increase is suggested to be $1 to $2 more each month. Netflix hasn't revealed a precise model for how the price increase will roll out, but reports have suggested that current subscribers won't see a price increase for some time. Instead, users signing up for a new Netflix account this summer will find the monthly rate increased to $8.99 or $9.99. (Source: cbc.ca)

Despite the price hike, it's expected the Netflix user base will grow substantially in the next few years. Clearly, investors agree, with Netflix shares rising 6 per cent earlier this week.

HBO Signs Deal with Time Warner

Meanwhile, one of Netflix's main competitors, Amazon, has reached a deal with Time Warner that will see HBO shows like "The Sopranos," "Six Feet Under," "The Wire," Boardwalk Empire," "Band of Brothers," and "John Adams" come to the Amazon Prime service very soon.

It's believed Amazon paid Time Warner over $300 million for the content. That means HBO shows will only be available through Amazon Prime for the next three years, keeping that content off rival services like Netflix, Crackle, and Hulu.

It's worth noting, however, that the deal doesn't include "Game of Thrones," HBO's most popular show. (Source: forbes.com)

What's Your Opinion?

Do you use video streaming services like Amazon Prime, Netflix, or Hulu, and if so, what was your experience like? Have you recently ditched your cable or satellite television in favor of Internet streaming services such as Netflix? Finally, will the Netflix price hike or Amazon HBO deal affect your decision to continue using video streaming, or does it matter?