Netflix Raises Subscription Price
The streaming service's standard plan now will cost $9.99 a month.
Netflix has raised the price of its standard streaming subscription by $1 a month.
The company's website was updated on the morning of Oct. 8 to reflect the price hike, which raises its mid-tier plan to $9.99 a month. Under that plan, Netflix offers HD video and the ability to stream on as many as two screens at the same time.
Netflix also offers a basic $7.99 plan that doesn't include HD and does not allow for simultaneous streaming. A premium $11.99 tier includes access to Ultra HD video and simultaneous streaming on four screens. Those plans are not affected by the price increase.
The price hike affects customers in the United States, Canada and Latin America and comes after a similar adjustment for European customers in August.
Current subscribers are being given a one-year grace period before their subscription fee increases.
The move comes not long after competitor Hulu announced a higher-priced subscription tier that does away with advertising. Hulu customers now pay either $7.99 a month or $11.99 a month for premium content with ads or without, respectively. Amazon, meanwhile, includes its streaming service as part of its $99-a-year Amazon Prime service, which also includes free shipping. That works out to $8.25 a month.
Netflix, which currently has more than 65 million subscribers, is counting on the price increase to help offset its increased spending on original and exclusive programming. The company has said it plans to spend $5 billion on original content and acquisitions next year.
"To continue adding more TV shows and movies including many Netflix original titles, we are modestly raising the price for some new members in the U.S., Canada and Latin America. As a thank-you to existing Netflix members — who aren’t already benefiting from a previous price guarantee — we will maintain their current price for a year," said a company spokeswoman in a statement.
Netflix shares were trading up more than 4 percent to $112.45 during midday trading on the Nasdaq.
Oct. 8, 12:02 p.m. Updated to include Netflix statement.