The service’s monthly standard plan will increase to USD 14 and its premium plan will rise to USD 18. Its basic plans will remain at USD 9 per month.
Netflix announced its decision to raise the prices on its standard and premium plans for US customers. New subscribers will have to pay the updated monthly fees, while current subscribers will see the new prices over the next few weeks as they roll out with the customer's billing cycles. "We're updating our prices so that we can continue to offer more variety of TV shows and films,” a Netflix spokesperson said in a statement. "We understand people have more entertainment choices than ever and we're committed to delivering an even better experience for our members.”
The service standard plan is now USD 14 a month, up to USD 1 a month from last year. Its premium subscription will go up to USD 2 to USD 18 a month. Its basic plan remains unchanged at USD 9 a month. “As always we offer a range of plans so that people can pick a price that works best for their budget,” the spokesperson stated.
The news comes a week the company posted slowing growth in new subscriptions and lower-than-expected profits, expected amid the increased consumption that came up this year due to the pandemic. The streaming company invests billions on content, and therefore is seeking to boost its revenue as subscriber growth is expected to substantially decrease in the future. The possibility of a price hike has been floated around Netflix analyst circles. In September, Alex Giaimo of Jefferies highlighted the ability for an increase of USD 1 to USD 2 a month in North America or Europe could generate USD 500 million-USD 1 billion in fiscal 2021 revenue.
Shares were up about 4% on the news in late-afternoon trading after the price-change news came out. They were down a tick after hours. In January 2019, Netflix raised its subscription prices by 13% to 18%, the steepest since the company began streaming video more than a decade ago. Those hikes took effect immediately for new subscribers and were phased in over three months for existing subscribers.
We're updating our prices so that we can continue to offer more variety of TV shows and films. We understand people have more entertainment choices than ever and we're committed to delivering an even better experience for our members.” Netflix