Netflix announces biggest subscription increase in 12 years

Oscar Cross
January 16, 2019

Netflix announced the biggest price hike in its history Tuesday with subscriptions going up by 13 to 18 percent, meaning the most popular plan cost will now cost about $156 per year.

The California-based company, which has almost half of its 130 million paid members in the United States, will raise the price of its most popular streaming plan with high-definition video by 18 per cent to $12.99 per month.

Netflix has announced another price hike across its range of plans, marking the largest increase since the company's streaming service launched. Meanwhile, the HD Standard plan (the most popular one) will rise from $11 to $13, and the 4K Premium plan will leap from $14 to $16.

Netflix shares soared at Tuesday's opening bell, extending the video streaming giant's impressive January run.

Analysts at RBC Capital Markets said the price increase would "generate a material boost to Netflix's profitability". The company's Disney+ service is expected to launch later this year and will cost less than Netflix.

If these other competitors do drive business away from Netflix, it'll be interesting to see if they raise their prices even higher. Existing customers will reportedly see their bills increase during the next three months.

It will take some time to gauge consumer reaction to the higher prices, but Wall Street is already thrilled.

This new price hike will allow the company to invest in more great entertainment and improve the overall Netflix experience. The company needs an ever-growing pile of cash to fund the original shows and movies that make Netflix's stable of exclusive content attractive enough to keep subscribers and entice new ones.

This is the first time since October 2017 that Netflix has raised prices for its USA subscribers.

Netflix fans, get ready to spend a little extra dough every month if you plan on keeping your subscription.

I understand why Netflix subscribers would be mad about prices going up again, but that's, unfortunately, how Netflix is going to compete against Hulu, Disney, WarnerMedia and all the other streaming service that will be popping up. Netflix is scheduled to report Q4 2018 results on Thursday, Jan. 17.

The last major price shift for Netflix was in 2017, but perhaps the most fraught, as noted by AP, was the 2011 decision to unbundle streaming and DVDs and charge the same for each, separately.

Other reports by

Discuss This Article