Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Are Netflix's and's Price Hikes a Win for Investors?

There are plenty of parallels between streaming first-mover Netflix (NASDAQ: NFLX  ) and's (NASDAQ: AMZN  ) Prime Streaming Video service.

Netflix has been around longer, but it hasn't taken long to establish its Prime Streaming service as one of the most powerful players in streaming media. Netflix and have also notched the most noteworthy wins in developing their own original content. 

Source: Netflix.

And recently, thanks to a series of moves from these companies, they share another trend: price hikes.

Is the price right?
Last week, Netflix announced that, effective immediately, it would increase the cost of its standard streaming membership for new members from $7.99 a month to $8.99, while also unveiling a cheaper option without HD streaming or the ability to use Netflix on multiple devices. This follows's March move to increase the cost of its Prime subscriptions to $99 per year from the original $79.

The culprit that's driving this pricey trend? Rising costs.

According to Netflix and, their respective price increases will be used entirely to deal with rising costs affecting their operations, instead of increasing profits for investors as some had hoped.

In the video below, tech and telecom analyst Andrew Tonner further examines the price hike news and what it means for investors.

3 great ways to play the "Death of Cable"
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 


Editor’s note: To clarify, the two-year period mentioned in the video refers to the delay of the price hike for current subscribers rather than a promise not to raise prices for new subscribers for two years.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2955506, ~/Articles/ArticleHandler.aspx, 9/3/2015 7:42:17 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Andrew Tonner

Andrew Tonner is a tech specialist for The Motley Fool. He is a graduate of The University of Arizona with a degree in Finance.

Today's Market

updated Moments ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 3:59 PM
AMZN $504.72 Down -5.83 -1.14% CAPS Rating: ***
NFLX $101.06 Down -4.38 -4.15%
Netflix CAPS Rating: ***