February 20, 2018

Netflix Subscriptions in the US Are About to Get More Expensive

06 October 2017, 12:22 | Erma Lawrence

Netflix content chief Ted Sarandos

Netflix content chief Ted Sarandos

In November, Netflix will raise prices for USA premium subscribers for the first time since 2014. The regular plan that is $7.99 a month, that only allows one-screen streaming in standard definition, will see no price change. The Standard two-screens streaming plan will now cost $10.99 a month (from $9.99) and the Premium four-screen plan that includes Ultra HD will now cost $13.99 (from $11.99).

Wall Street appeared to approve of the move, as Netflix shares were up almost 4% to $191 apiece in midday trading.

Analysts predict Netflix will see subscriptions rise to more than 160 million within the next three years, with global customers becoming the largest audience. Netflix will notify existing subscribers by October 19 when the price will go up and will give at least 30 days notice before the new bill will need to be paid.

Despite the increased expense, Netflix remains competitive with streaming rivals.

Netflix's "content prowess" gave it the pricing power to raise prices, according BTIG Research's Rich Greenfield, sooner than the analyst expected.

Netflix NFLX has been investing heavily in original and exclusive access to content, pushing its costs ever higher.

"Most investors believe that Netflix is priced well below its value to consumers and want to see the management continue to increase monetization", Rob Sanderson analyst at MKM Partners said. The firm plans to spend a staggering $7 billion on new shows in 2018 alone. Hulu pricing on content without commercials costs $11.99 per month.

Netflix is cheaper than many of its competitors despite the current price hike.

While Netflix's pricing will now be higher, the company's streaming service is still cheaper than many of its competitors, including HBO Now, which offers access exclusively to that network's content for $15 a month.

You might notice something different on your Netflix bill starting next month.

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