Netflix raises monthly subscription prices in U.S., Canada

LOS ANGELES, Jan 14 (Reuters) – Netflix Inc raised the price of its monthly subscription by between $1 and $2 per month in the United States, according to the plan, the company said on Friday, to help pay for new programming to compete in the crowded streaming. television market.

The standard plan, which allows for two simultaneous streams, now costs $15.49 per month, up from $13.99 in the US.

Prices also rose in Canada, where the standard plan rose to C$16.49 from C$14.99.

Sign up now for FREE unlimited access to Reuters.com

Shares of Netflix rose almost 3% to $533.84 on the Nasdaq after Reuters broke news of the price hikes. They closed 1.3% higher at $525.69.

The increases, the first in those markets since October 2020, took effect immediately for new customers. Existing members will see the new prices in the coming weeks when they receive their monthly bills.

“We understand that people have more entertainment options than ever and we are committed to providing an even better experience for our members,” said a Netflix spokesperson.

“We are updating our pricing so we can continue to offer a wide variety of quality entertainment options. As always, we offer a variety of plans so members can choose a price that fits their budget,” the spokesperson added.

The world’s largest streaming service is facing the biggest competition from companies looking to attract viewers to online entertainment. Walt Disney Co (DIS.N), AT&T Inc’s WarnerMedia (TN), Amazon.com Inc and Apple Inc (AAPL.O) are among the rivals pouring billions into new programming.

Netflix has added customers despite previous price hikes, showing its members have been willing to accept higher costs, said Mark Mahaney, an analyst at Evercore ISI.

“This is evidence that Netflix has pricing power,” Mahaney said.

Netflix had said it would spend $17 billion on programming in 2021. The company hasn’t disclosed spending for 2022.

The US price of Netflix’s premium plan, which allows four streams at once and ultra HD streaming, has been increased by $2 to $19.99 per month. For the basic Netflix plan, with one stream, the cost increased $1 to $9.99 per month.

In Canada, the premium plan increased by C$2 to C$20.99, and the basic plan remained unchanged at C$9.99.

At $15.49 per month, Netflix’s US Standard plan now costs more than its competitors. HBO Max, owned by AT&T Inc (TN), is currently offering a promotion of $11.99 per month for 12 months.

Disney+ by Walt Disney Co (DIS.N) is priced at $7.99 per month or $79.99 per year.

The United States and Canada is Netflix’s largest region with 74 million streaming customers as of September 2021. The region accounted for almost 44% of the company’s revenue in Q3 2021, or about $3.3 billion.

Most of the company’s recent subscriber acquisition has come from abroad.

Netflix’s subscriber growth slowed due to a boom early in the COVID-19 pandemic, but has rebounded with the help of global phenomenon “Squid Game,” a dystopian thriller from South Korea released in September. Total global subscriptions reached 213.6 million.

The company’s next subscriber report is due Thursday, when Netflix releases quarterly earnings. Analysts project the company will report 8.5 million new subscriptions from October to December, according to data from Thomson Reuters I/B/E/S, bringing its global subscriber base to 222 million.

Sign up now for FREE unlimited access to Reuters.com

Information from Lisa Richwine; Additional reporting by Dawn Chmielewski; Edited by Cynthia Osterman

Our standards: the Thomson Reuters Trust Principles.

.

Leave a Comment