After two years without raising prices, online content provider Netflix is boosting the cost of certain subscription plans. "Mitchelson added that "[Netflix] management would be unlikely to implement such a price increase if USA subscriber trends were disappointing, bolstering our confidence further".
The price increases come at a time when Netflix is spending big money to produce new content.
According to Bloomberg, trading of Netflix shares surged following Thursday's news, signaling confidence from investors that the company will continue to grow even with the price hike.
The spokesperson added that existing users will begin receiving notifications on October 19.
The basic service, which enables Netflix streaming on one screen and doesn't allow for HD or ultra HD viewing, will remain at $7.99. You will have at least 30 days of notice until your bill goes up, and so the actual date when you'll start paying more will vary a bit depending on your personal billing cycle. The standard Netflix plan that offers HD viewing on up to two devices simultaneously will now cost $10.99 a month, $1 up from its previous cost of $9.99.
The upcoming increase represents the first since 2015, and the $7.99 subscription in particular has never been changed. In fact, in 2016 alone, the company spent $6 billion on over 600 hours of both original programming and acquisitions. Current subscribers won't see the price hike for several weeks, and Netflix will alert existing customers before implementing the increase.
"This determination confirms that, as Boeing alleged in its petition, Bombardier dumped its aircraft into the USA market at absurdly low prices", it said in a news release. This made a lot of people ask whether or not this would effect T-Mobile's Netflix On Us promotion and, it doesn't.
Analysts at Jefferies expect the price increase to drive a mid- to high single digit percent impact on domestic revenue, but said content investment could offset whatever benefit to overall profitability.