Netflix raises subscription prices in US and Canada, stock jumps

• Netflix said the new prices will ‘apply to new members and will gradually take effect for all current members’

• Streaming giant previously raised prices for U.S. customers in 2019 and 2020

Netflix Inc (NASDAQ: NFLX) raised monthly subscription prices for its streaming service in the U.S., and Canada sending the stock up nearly 4.5% on Friday.

The monthly subscription for the basic plan, which streams non-high definition content on one device, rose $1 to $9.99.

Similarly, the standard plan, which streams 1080p content to two devices, jumped from $13.99 to $15.49, and the premium plan, with 4K streaming to up to four devices, jumped from $17.99 to $19.99.

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Netflix has updated the new prices on its website. The subscription prices for Canada have increased as well.

“These prices apply to new members and will gradually take effect for all current members. Current members will receive an email notification 30 days before their price changes, unless they change their plan,” according to the website.

Revising plans

“We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options,” a spokesperson said in a statement.

The streaming giant has been revising its prices, which is a part of the company’s long-term strategy. Netflix previously raised prices for U.S. customers in 2019 and 2020.

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Netflix’s price increases come as customer growth declines, reflecting its confidence that its subscription is so deep-rooted in its customers’ lives and that they will not cancel even after price hikes.

However, the California-based company slashed its plan prices in India last month after facing intense competition from Walt Disney Co (NYSE: DIS) and Amazon.com Inc’s (NASDAQ: AMZN) Prime Video, and tap on the huge population.

Netflix is facing more competition than ever from streamers, including Disney+, HBO Max, Prime Video, and Apple Inc’s (NASDAQ: AAPL) Apple TV+.

Last fall, the company said it had over 213 million subscribers worldwide, which is much higher than the subscription count of its new rivals. As a result, Netflix invested heavily in producing content for its service and said it would spend $17 billion on content in 2021.

Picture Credit: Protocol