Netflix unveiled plans Tuesday to boost prices for United States subscribers, a move that helped lift shares of the streaming television giant which now faces an array of new competitors. The latest hike, at 13 percent to 18 percent, represents the largest increase in its 12-year history.
Netflix did not address this, but issued the statement: "We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience". The streaming wars won't end anytime soon, and as Netflix is now acknowledging, there can't be only one, so they're strategizing accordingly.
The news comes two days before the company announces it Q4 earnings - and sent shares up 6%. The price hikes affect all new subscribers immediately, as you can see on the Netflix signup page, but current subscribers will begin to see the new prices reflected in their bills over the next three months.
The company's top-tier plan, which allows streaming on four screens in high definition, will be raised to $15.99 from $13.99 per month, while fee for its basic plan will rise to $8.99 from $7.99. Amazon-owned IMDB also recently launched a free streaming service, called Freedive. To fund its content-spending binge, Netflix has raised billions in new debt: It reported $8.34 billion in long-term debt as of September 30, up from $6.50 billion at the end of 2017.
The added subscription price will surely help the firm invest in more original content. AT&T's WarnerMedia unit plans a broader streaming service this year centered on HBO.
According to AP, the price increase is a way for Netflix to offset its ambitious content production, which cost close to $8 billion in 2018.