Netflix subscription price to increase (Photo: Twitter)
The streaming giant, Netflix is raising its U.S. prices by 13 to 18 percent sending its stock soaring Tuesday morning up by $20.91, or just over 6 percent to $353.85. This will be the biggest increase hike ever since the company launched its video streaming service 12 years ago. A Netflix spokesperson told Hollywood Reporter, “We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,".
Its most popular plan will see the largest hike, to $13 per month from $11. That option offers high-definition streaming on up to two different internet-connected devices simultaneously. Even at the higher price, that plan is still a few dollars cheaper than HBO, whose streaming service charges $15 per month.
The extra cash will help to pay for Netflix’s huge investment in original shows and films and finance the heavy debt it has assumed to ward off rivals such as Amazon, Disney and AT&T and also to keep up with the rivals as searches heats up for the next Orange Is the New Black or House of Cards against rival series from Amazon, Hulu and other rivals.
This hike will be the fourth time Netflix has raised its U.S. prices, the last being in late 2017. But this is the first time that higher prices will hit all 58 million U.S. subscribers, the number Netflix reported at the end of September.
Earlier, Netflix had continued to offer a basic, $8-a-month streaming plan while raising rates on more comprehensive plans with better video quality and options to watch simultaneously on different devices.
The price hike will kick in immediately for new Netflix subscribers while existing customers will see the monthly subscription will see the price increase on their bills over the next three months.
As Internet streaming services become increasingly popular amid continuing cord-cutting, Netflix and rival streamers are aggressively spending to acquire new series from major Hollywood and international suppliers or to produce their own original shows.