Netflix to raise price of most popular plan

Gladys Abbott
October 8, 2017

Netflix is raising subscription prices in the us and parts of Europe as the leading online streaming service invests in more shows and features, the company said Thursday.

Mitchelson said the price increases represent a roughly 10% effective increase to ARPU. This is the first time the company has increased prices in two years, USA Today reported. As the standard plan gets you HD and 2 streams and the higher-end plan gets you 4K and four simultaneous streams.

The price increase was limited to the US and a handful of European countries including France, Britain and Germany, Netflix said.

When Netflix raised prices for some customers by as much as US$6 in 2011, 800,000 USA subscribers to deserted the service.

Shares of Netflix hit a new all-time high on news of the price hikes, climbing more than 4% and peaking at $192.80 per share in Thursday morning trading.

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The spokesperson added that existing users will begin receiving notifications on October 19.

The US-based streaming network said it will raise the price of a standard United Kingdom plan 50p to £7.99 per month and the premium plan by £1 to £9.99 per month. It depends if you are a current subscriber or a new subscriber. The streaming service evidently plans to spend $1.5 billion on original programming in 2017. Without support from advertisements, Netflix needs the price hike to help defray the cost of producing this content.

Just previous year, Netflix hiked the member rate for the standard HD plan to $9.99, a whole dollar increase from $8.99. The standard plan which enables subscribers to watch on two screen simultaneously will now cost $10.99 instead of $9.99.

While the basic tier users are probably happy that there is no change to their plan, Netflix will probably experience some pushback from users in the other tiers. But don't think we didn't notice, Netflix.

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