Nearly half a million Netflix customers may cancel their subscriptions after the streaming service raises its prices over the next several months.
Around 27 million U.S. Netflix subscribers will be subjected to a price increase totaling $9.99 per month at some point this year, according to Nomura Securities analyst Anthony DiClemente. He estimates that roughly 480,000 customers might call it quits because of the raise, which would give Netflix a $520 million increase in annual revenue.
“We note that this has long been a tenet of our investment thesis on the domestic business, as slowing subscriber trends are more than offset by increased monetization,” DiClemente wrote.
Netflix ended the first quarter of 2016 with a record 81.5 million worldwide subscribers with 47 million in the United States alone.
In May, Netflix began upping the prices on recent U.S. customers from $7.99 per month to $9.99 per month.
“We will phase out this grandfathering gradually over the remainder of 2016, with our longest-tenured members getting the longest benefit,” Netflix CEO Reed Hastings wrote in April. “We are rolling this out slowly over the year, rather than mostly in May, so we can learn as we go.”