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Why Netflix Will Cost More Now

NEW YORK (TheStreet) - Netflix (NFLX - Get Report) is raising the price for its most popular monthly subscription. The company confirmed on Friday that new customers will now be charged $8.99 a month for unlimited video streaming to two screens, effectively immediately.

Existing customers will stay at the $7.99 a month price for a period of two years, Netflix spokesman Joris Evers confirmed to TheStreet in an email. There are no changes to Netflix's $11.99 a month plan for streaming to four devices. It also hasn't made any changes to customers who want to rent DVDs.

Netflix says an email has been sent to existing customers. According to Fortune, the email thanked customers for their business and said "we guarantee that your plan and price will not change for two years."

Netflix announced the price change during its quarterly earnings call last month. At the time, the company was weighing a price increase between $1 and $2 a month. CEO Reed Hastings said the revenue would be used toward acquiring additional content, particularly in the creation of original content. Netflix's House of Cards series and Orange is the New Black series have been wildly successful among subscribers and enticing new members to join.

Just hours after Netflix's earnings call, Amazon (AMZN) announced an exclusive content deal with Time Warner's (TWX) HBO to license older, yet still popular shows, like The Sopranos, The Wire and older seasons of True Blood and Boardwalk Empire to be viewed on Amazon Prime Instant Video. Game of Thrones and HBO's newest show True Detective were not among the shows that are a part of the deal.

The move one-ups Amazon as it also ramps up its streaming service offerings through the release of Fire TV, its streaming device system competing with Apple (AAPL) TV, Google (GOOG) Chromecast and Roku.

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The price change makes Netflix more expensive on an annual basis. Amazon Prime costs $99 a year, compared to Netflix's now $108 annual price.

--Written by Laurie Kulikowski in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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