Netflix Sets Biggest Subscription Price Hike
The streaming service saw its share price rise 6 percent as it's increasing costs for users as its programming and talent fees climb.
Netflix is set to make its biggest subscription price increase ever Jan. 15 as programming and talent costs climb, which sent its stock soaring Tuesday morning up by $20.91, or just over 6 percent to $353.85.
“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," a Netflix spokesperson told The Hollywood Reporter.
As streaming wars escalate, Netflix's most popular plan will see the largest hike, to $13 per month from $11. That plan offers HD streaming on up to two Internet-connected devices at the same time.
Netflix says it has aimed to balance the cost of producing new video content with keeping its prices affordable for consumers as it continues to compete against Amazon Prime, Hulu and new services to come from NBCUniversal, Disney and WarnerMedia.
The single subscription price will rise from $8 to $9, and the four-subscriber plan, which offers Ultra HD, will rise from $14 to $16 per month. Existing subscribers will be notified about the pending price hike via email, Netflix said.
The price hike will kick in immediately for new Netflix subscribers, while existing customers will see the monthly subscription increases phased in over three months.
The last price increase for Netflix subscribers was in 2017. The aim then as now is to cover sky-high content costs as the search heats up for the next Orange Is the New Black or House of Cards for Netflix to go up against rival series from Amazon, Hulu and other rivals.
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.
Upcoming series from Netflix include The Umbrella Academy, starring Ellen Page, the final season of Orange Is the New Black and the third season of Stranger Things. On the movie front, Netflix has J.C. Chandor's Triple Frontier, starring Ben Affleck and Oscar Isaac in the pipeline, along with Michael Bay's 6 Underground, starring Ryan Reynolds.
News of Netflix's latest possible price hike also follows NBCUniversal unveiling plans Monday to launch a streaming service of its own. The media conglomerate is preparing for the 2020 launch of an ad-supported, direct-to-consumer service to rival those in the works from Disney and WarnerMedia.