Netflix is raising USA subscription prices 13 to 15 percent in the biggest rate increase in its history, the company announced Tuesday. A premium subscription, which doubles the number of screens that can watch at once and deliver Ultra HD video, will now cost $16 per month, up from $14.
Earlier today, Netflix announced price increases for all three of its plans.
Netflix's first official price hike came in October 2015, when it pushed up the price of its standard tier up by $1 a month to $9.99. In 2011, Netflix said it would divorce its DVD-by-mail service from its streaming one.
For them, I'd even argue that Netflix could raise prices at a level some people might think is too high - while these subscribers look for something else to cut, instead, in order to hang on to Netflix.
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One way to push ARPU back up, suggest some, would be for Spotify to increase the price of its offering to consumers.
As of September 2018, Netflix has amassed an approximate $8 billion long-term debt, which some think is unsustainable.
"We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience", a company spokeswoman said in a statement.
The most expensive plan includes four simultaneous streams of 4K video at once on the same account.
This marks the fourth time that Netflix has raised its United States prices with the last hike coming in late 2017.
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Netflix's previous subscription increase in 2017 did little to slow growth, as Netflix added 24 million customers that year.
Netflix is scheduled to report its fourth-quarter results after market close on Thursday.
The company's shares soared six percent in response to news of the price hike, as analysts looked favorably upon the revenue implications and said they saw little downside.
While all Netflix users will spend just a few dollars more per month, that may be enough to prompt some to cancel their subscriptions.
Proving as ever that Wall Street works in mysterious ways, as of 10 a.m. on Tuesday morning, Netflix stock is up more than 5% following the price hike news.
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