Los Angeles, Jan. 16 (U.S.) – Netflix Inc. is raising the price of its monthly subscription by $1 to $2 a month in the US depending on the plan, the company said Friday, to help pay for new software to compete in a crowded market. Stream TV Market.
Reuters reports that the Standard plan, which allows two simultaneous streams, now costs $15.49 per month, up from $13.99 in the US.
Prices also rose in Canada, where the Standard plan jumped to CAD 16.49 from CAD 14.99.
Netflix shares rose nearly 3% to $533.84 on the Nasdaq after Reuters reported the price hike. It closed 1.3% higher at $525.69.
The increases, the first in those markets since October 2020, took 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 are committed to providing a better experience for our members,” a Netflix spokesperson said.
“We’re updating our pricing so we can continue to offer a variety of high-quality entertainment options. As always, we offer a range of plans so members can choose the right price for their budget,” the spokesperson added.
The world’s largest streaming service faces the biggest competition ever from companies looking to lure viewers into online entertainment. Walt Disney Co, AT&T Inc’s WarnerMedia, Amazon.com Inc and Apple Inc are among the competitors pumping billions into new programming.
Mark Mahaney, an analyst at Evercore ISI, said that Netflix added customers despite previous price increases, indicating that its members were willing to accept higher costs.
“This is proof that Netflix has pricing power,” Mahaney said.
Netflix had said it would spend $17 billion on programming in 2021. The company did not disclose its spending for 2022.
The price of Netflix’s premium plan in the US, which allows four simultaneous streams and broadcasts in Ultra HD, has been increased by $2 to $19.99 per month. For the basic Netflix plan, with a single stream, the cost went up by $1 to $9.99 per month.
In Canada, the Premium plan went up C$2 to C$20.99, and the Basic plan was unchanged at C$9.99.
At $15.49 per month, Netflix’s Standard US plan now costs more than competitors. HBO Max, owned by AT&T Inc, is currently offering a promotional offer of $11.99 per month for 12 months.
Disney+ from Walt Disney Co. is priced at $7.99 a month or $79.99 a year.
The United States and Canada are Netflix’s largest region with 74 million streaming customers as of September 2021. The region accounted for approximately 44% of the company’s revenue in the third quarter of 2021, or about $3.3 billion.
Most of the company’s recent increase in subscribers has come from abroad.
Netflix’s subscriber growth slowed from the early boom in the COVID-19 pandemic, but it rebounded with the help of global phenomenon “Squid Game,” a dystopian South Korean thriller released in September. Global subscriptions totaled 213.6 million.
The company’s next subscriber report is due Thursday when Netflix releases quarterly earnings. Analysts expect the company to report 8.5 million new subscriptions from October through December, according to Thomson Reuters I/B/E/S data, bringing its global subscriber base to 222 million.
MI