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article imageMany Netflix users to see price hike in May

By Business Insider     Apr 7, 2016 in Business
Netflix will raise prices on about 17 million of its standard accounts next month, and most people have no idea.
How will these subscribers react?
In May 2014, Netflix began to raise the price of its standard streaming plan for new subscribers, first to $8.99 a month, then to $9.99 a month starting in October. Existing subscribers, however, were grandfathered into the plan at $7.99 a month for the two-stream, "HD" quality plan.
But those days will soon be over.
Next month, all grandfathered customers will be moved up to $9.99 for the standard plan. Analysts at UBS have estimated that this change will affect about 37% of US subscribers, or 17 million people.
And most of those 17 million subscribers aren't aware of the coming changes, according to research by JPMorgan. About 80 percent of those in a recent JPMorgan survey who will be "un-grandfathered" in May didn't know the price hike was coming.
How will these subscribers react?
UBS estimates that roughly 3 percent to 4 percent of affected subscribers will cancel, though many more say they will (about 15 percent of those surveyed by JPMorgan).
Despite the price increase, Netflix still has a lead in "price per hour of entertainment" over pay TV. Netflix costs $0.09 per hour of viewing, while a typical pay-TV package costs $0.30 an hour, according to UBS.
Here is Netflix's current pricing structure:
This article was originally published on Business Insider. Copyright 2016.
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