Published: Tue, January 15, 2019
Culture&Arts | By Dora Pope

Netflix Announces Its Biggest Streaming Price Increase Ever

Netflix Announces Its Biggest Streaming Price Increase Ever

In the past, Netflix has rolled out price increases to its newer members first and its most loyal subscribers last. In fact, last quarter Netflix said its subscriber pool has grown by 10.7% year over year, and it now sits at 58 million subscribers in the US and 78 million internationally. CNBC reports that Netflix will raise monthly subscription prices across all tiers with the Basic plan going from $8 to $9.

Netflix increased the prices of all three of its U.S. plans on Tuesday, some by as much as 18%, which makes this the most substantial price jump since the streaming service debuted in 2007.

Finally, its most premium offering that allows customers to binge in 4K will come in at $16-per-month instead of $14-per-month.

"We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience".

The company's price increase could also be seen as a bet it can continue raising prices over the coming years.

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Netflix shares rose 6 percent to $352.64 in morning trading, adding to their 30 percent rise so far this year.

The rate increases will take immediate effect for new subscribers, though the company's 58 million existing United States customers will be transitioned to the new subscription prices over the next three months.

Netflix has been investing heavily in recent years in original content and accessing the rights to popular content. Netflix lost 600,000 subscribers after that switch. Amazon-owned IMDB also recently launched a free streaming service, called Freedive. The Los Gatos, California, company had accumulated almost $12 billion in debt before borrowing another $2 billion in an October bond offering.

Investors reacted enthusiastically to Tuesday's news, signaling their belief that the price increase won't significantly slow Netflix's subscriber growth. For now, Mexico and Brazil are excluded, and it is not clear if Netflix has plans to introduce higher prices in other parts of the world.

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