Netflix Inc has raised its monthly subscription price in the United States by $1 to $2 a month, depending on the plan, the company said Friday to help pay for new programming to compete in the crowded streaming TV market .
The standard plan, which allows two simultaneous streams, now costs $15.49 per month in the US, up from $13.99.
Prices also rose in Canada, where the standard plan went from $14.99 to $16.49.
| ticker | safety | Last | change | Change % |
|---|---|---|---|---|
| NFLX | NETFLIX INC. | 525.69 | +6.49 | +1.25% |
Netflix shares rose almost 3% on the Nasdaq to $533.84 after Reuters broke news of the price hikes. They closed 1.3% higher at $525.69.
The increases, the first in these markets since October 2020, went into effect immediately for new customers. Existing members will see the new prices in the coming weeks when they receive their monthly bills.
“We understand that people have more entertainment options than ever before, and we’re committed to providing our members with an even better experience,” said a Netflix spokesperson.
NETFLIX’S “DON’T LOOK UP” BREAKS THE RECORD FOR MOST WATCHING HOURS IN A SINGLE WEEK
“We are updating our prices so we can continue to offer a wide variety of quality entertainment options. As always, we’re offering a range of plans so members can choose a price that fits their budget,” the spokesperson added.
The world’s largest streaming service faces its toughest competition ever from companies looking to engage viewers in online entertainment. Walt Disney Co, WarnerMedia by AT&T Inc, Amazon.com Inc, and Apple Inc are among the competitors pouring billions into new programs.
Netflix has added new customers despite previous price increases, showing its members were willing to accept higher costs, said Mark Mahaney, an analyst at Evercore ISI.
“This is evidence that Netflix has pricing power,” Mahaney said.
Netflix had announced it would spend $17 billion on programming in 2021. The company has not disclosed its 2022 spending.
The US price of Netflix’s Premium plan, which allows for four streams simultaneously and streaming in Ultra HD, has increased by $2 to $19.99 per month. For Netflix’s basic, single-stream plan, the cost increased by $1 to $9.99 per month.
In Canada, the premium plan increased by C$2 to C$20.99 and the base plan remained unchanged at C$9.99.
CAROLE BASKIN FILES LAWSUIT AGAINST NETFLIX OVER “TIGER KING” SEQUEL
At $15.49 per month, Netflix’s standard US plan now costs more than the competition. HBO Max, owned by AT&T Inc., is currently offering a 12-month promotion at $11.99 per month.
Walt Disney Co’s Disney+ is priced at $7.99 per month or $79.99 per year.
The United States and Canada is Netflix’s largest region, with 74 million streaming customers as of September 2021. The region accounted for nearly 44% of the company’s revenue in Q3 2021, or about $3.3 billion.
Most of the subscribers the company has recently acquired are from abroad.
GET FOX BUSINESS ON THE GO BY CLICK HERE
Netflix subscriber growth slowed after booming at the start of the COVID-19 pandemic, but rebounded with the help of the global phenomenon “Squid Game,” a South Korean dystopian thriller that released in September. The total number of worldwide subscriptions reached 213.6 million.
The company’s next subscriber report is due Thursday when Netflix releases its earnings results. Analysts expect the company to report 8.5 million new subscriptions from October to December, according to I/B/E/S data from Thomson Reuters, taking its global subscriber base to 222 million.
