In recent times, Netflix announced that it has increased its United States subscription prices from 13% to 18%, this move made the increase the biggest we have seen in the streaming service provider since it started about 12 years ago.
The most popular plan available in their service is going to rise from $11 to $13 per month. When selecting this popular option, the company offers its subscribers the option to simultaneously stream on two separate devices when connected to the internet, along with the HD (high-definition) streaming. Although the plan costs more, but it is still cheaper than the competition, HBO with two dollars.
A country like Canada will also see a hike in their price in Netflix’s next billing cycle, as it has already been scheduled to rise, however the recent additional costs that were announced on 15th of January are on top of that, and it is for American customers only.
Netflix stated that all the extra income from the hiking is going to be used to pay for the ever growing acceptance of Netflix’s original films and series, and also to provide all their customers with better services continually. The proceeds will also be used to recover from the substantial debt which Netflix has accumulated in order to fight off competition from Disney, Amazon, Hulu, and AT&T.
Customers might not be happy about the recent rise in prices, on the other hand Wall Street was very happy about the new development, because shares went up significantly with more than 5% during the mid-day trading.
Netflix has offered a basic plan of $9 per month in the past, even though they raised the rates on plans with more options and better video quality for clients. This time around, the new price for the basic plan is jumping to $9 per month. While the premium plan which features an ultra-high definition viewing is moving up from $14 to $16 a month.
These new prices will have an immediate impact on all Netflix’s new subscribers, and all the existing U.S. customers will join the new price within three months. Netflix consumers in about 40 Latin America countries where the company bills in U.S. dollars will also be affected, except for Brazil and Mexico.
Even though the company’s higher prices might alienate some subscribers and probably trigger a wave of cancellations among current clients, Netflix believes that the move will steadily increase costs with new acclaimed hits such as Fuller House, The Haunting of Hill House, Stranger Things, Orange Is the New Black, and most recently, Bird Box. These are some of the company’s top-rated Netflix Originals. Netflix also states that the upward review of their prices is to strengthen the company to produce more of such great films and interesting series.