Netflix's Experiment Spurs Speculation About Price Hikes in Italy

(Bloomberg) -- Netflix Inc. is experimenting with higher prices in Italy, a sign it could soon raise rates for all its customers in one of Europe’s largest markets.

The company has been testing a new pricing scheme for some users that makes its premium plan about 18 euros ($20.50) a month, a change spotted by local blog Smartworld. Its current prices in the European Union range from about 8 euros to 14 euros.

Netflix has been raising prices in markets all over the world during the past few years, boosting its sales so it can spend ever more money on new shows and movies. The company has already bumped up prices in the U.S., its largest market, a couple of times. 

The latest domestic price hike, announced last month, increased the cost of Netflix’s most popular plan by 10 percent to $11. Analysts and investors used to fear that price increases would compel customers to cancel their subscriptions. But users have stayed loyal, and investors applauded the most recent hike in the U.S.

As for Italy, Netflix cautioned that the price changes are still just an experiment.

“We are testing slightly different prices to better understand how members value Netflix,” the Los Gatos, California-based company said in a statement. “Not everyone will see this test, and we may never roll out these specific prices beyond this test. Our goal is to ensure that Netflix is always great value for money.”

To contact the reporters on this story: Nick Turner in Los Angeles at nturner7@bloomberg.net;Lucas Shaw in Los Angeles at lshaw31@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Timothy Annett

©2019 Bloomberg L.P.