Netflix is going to be raising prices regarding their streaming services over the course of this year – creating predictions that nearly 500,000 customers will cancel their subscriptions.

Nearly 27 million of their customers will be subject to a price increase of $9.99, Variety learned from Nomura Securities analyst Anthony DiClemente. His prediction included that the price increase could result in at least 480,000 subscribers to cancel their subscriptions.

However, the prediction also includes that the increase in price will lead to an additional $520 million in additional annual revenue for Netflix.

“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 in a research note. He predicted the estimates, according to Variety, by “assuming a 2% churn rate for subscribers on the receiving end of a $2-per-month price increase and a 1% churn rate for those whose plan would go up by $1.”

This increase in revenue would also mean that Netflix would be able to include more content for their streaming services.

Netflix CEO Reed Hastings wrote to shareholders this past April that they “will phase out this grandfathering gradually over the remainder of 2016, with our longest-tenured members getting the longest benefit. We are rolling this out slowly over the year, rather than mostly in May, so we can learn as we go.”

With all that said, these are only predictions, so it’ll take time to see what Netflix’s plans will result in for the marketplace.

Source: MarketWatch