Millions of UK Netflix subscribers who want to catch up with House of Cards or watch the new series of Orange is the New Black face a £1.50 price hike, making it more expensive than its on-demand rival, Amazon Prime.
Early Netflix adopters who currently pay £5.99 a month will now have to pay £7.49 a monthfor the same service, it confirmed in an email to subscribers this week.
It comes as the on-demand service ramps up its investment on new content, such as its first UK production, the £100m royal epic The Crown, starring Claire Foy.
The price for new customers was increased, from £6.99 to £7.49, in June 2015.
Customers can opt to remain on the £5.99 package but will lose high-definition picture quality and will only be able to watch on one screen rather than two.
Amazon’s Prime Video, which will broadcast Jeremy Clarkson’s new Top Gear rival, The Grand Tour, costs £5.99, or £7.99 including its free delivery service, Amazon Prime.
In a pricing structure almost as convoluted as Frank Underwood’s rise to the White House, the price rise will not affect all of Netflix’s more than 5 million customers in the UK.
The £1.50 increase only applies to those who signed up before a previous price rise in May 2014, if they choose the two-screen, HD option.
The UK was one of Netflix’s first markets outside the US, launching in 2012.
Once best-known for its archive of film and TV content, it has invested heavily in new programming in a bid to attract new subscribers.
The price rise sees the beginning of the end of Netflix’s policy of offering cheaper subscriptions to long-standing customers, a process known as “grandfathering”. Similar changes were introduced in the US in May.
Netflix has seen rapid expansion with more than 5m households signed up to the service according to research by ratings agency Barb.
Rival services such as Amazon and Sky’s Now TV have not yet managed to match its success, but its burgeoning popularity has also come at a cost in terms of content.
Last year, Netflix revealed that the cost of acquiring, licensing and producing TV and film content over the next five years surged past the $10bn mark for the first time.
Its $1.4bn increase in total spend last year was mainly because of a major drive to expand the amount of exclusive and original programming it offers to entice new customers.
Netflix does not publish viewing figures for any of its shows, but this week gave a glimpse into how its customers “binge-watch” on their favourite shows, suggesting the first season of a TV drama was typically completed in just a week.
The barely profitable Netflix made almost $7bn in revenues last year as subscriber numbers climbed by 30% to 75 million.
The company has spied rapid expansion beyond its home market in the US as the key to building subscribers numbers and revenues to start to drive significant profits.
In January, the company announced an aggressive roll-out to an additional 13 countries, effectively making the service available in all but a handful of places including China, North Korea and Syria.
At the end of last year, Netflix had 27 million paying subscribers outside the US – it has about 5 million in the UK – and its international operation made a loss of £333,000.
By comparison, Amazon’s video service is available in just five markets to date (UK, US, Germany, Austria, Japan), with a UK subscriber base estimated at 2 million.
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This article was amended on 13 June to correct the point about Netflix price rises. The original piece said the price for new customers was to be increased from £6.99 to £7.49, when in fact it was increased in June 2015.
