Why You’ll Be Paying More for Netflix in a Year or Two

netflixNetflix CEO Reed Hastings learned the hard way that announcing a big price increase can blow up into a huge controversy. So for his latest effort to charge more, he’s moving slowly — very slowly.

Along with Monday’s quarterly earnings release for Wall Street, Hastings said the cost of Netflix would go up $1 to $2 a month for new customers, depending on the country. Current customers will be “generously grandfathered” for at least a year, maybe two. Hastings had foreshadowed the increase on January’s earnings call as well, confirming that Netflix was testing different price points.

But at the current popular price of $7.99 a month, Netflix is growing like mad and expanding worldwide. It gained almost 12 million paying members over the past year, and revenue was up 24%. So why the need for a price increase?  More