It has been the biggest price increase by Netflix. The streaming giant has raised prices in the U.S. to 18 percent from 13 percent. After its launch 12 years ago, this has been the biggest price increase by Netflix.
Netflix has been a firm competitor of its rivals, Disney, Amazon, and AT&T. With the price hike, Netflix hopes to pay off its financial assets accumulated to stay competitive. Apart from this, it has invested in films and original shows that have been very expensive. However, how it fares against its competitor’s prices, remains to be seen.
One of the plans from Netflix has been hiked from $8 to $9, while another has changed from $11 to 13 and the premium plan has increased from $134 to $16.
The price hike in Netflix is the fourth time; the last hike had come in 2017. But this time, the hike has been higher and will affect about 58 million of its subscribers in the U.S.
Streaming services of Amazon are just $13 per month for its Prime shipping program and an annual membership of $120. Warner Medica of AT&T will be concentrating on HBO to broaden its streaming services. Hulu is selling ad-free services for a monthly payment of $12.
Another new entry expected into the video-streaming services is Apple. With this new competition, the pressure to retain and expand its subscriber base has increased on Netflix.
As of September, Netflix subscribers are roughly estimated to be 79 million subscribers outside the U.S.
Share prices of Netflix had increased by $21.70 and closed at $354.64, its highest close in three months. Investors have shown enthusiasm that subscriber growth of Netflix has not slowed down even under high competition and price increase.
However, in June it had reached a high of $423.21 before crashing down, due to lower profits and increasing competition. Industry dominance is still held by Netflix.