Netflix will raise its U.S. subscription prices to an all time high. Netflix has steadily increased the prices of its subscription packages since it began streaming video over a decade ago. The subscription increase is emblematic of the company’s intention to put a larger emphasis on becoming a major distributor and content creator for original and exclusive television and film.
Each of the Netflix subscription plans are set to increase the monthly payment by $1-2. For example, the company’s HD Standard plan will now be $13 per month instead of its previous $11 monthly payment. The price hike comes at a time when there are still many questions regarding the future of the streaming service. Disney, Warner Brothers, and NBC Universal have all announced that they each intend to release their own streaming platforms that will hold and distribute their original IP. Not only will this generate more competition for Netflix, but it may put noticeable strain on the company’s library of content. In addition, Netflix’s attempts to produce an incredible quantity of content has caused some problems for the studio. Last October, the streaming service added $2 billion to their now $12 billion of outstanding debt. The streaming service has increased its subscription cost in an attempt to maintain the studio’s content output without burning additional cash.
Regardless of these possible obstacles facing the company, Netflix’s stock continues to soar. After the announcement of the price increase, the Netflix stock rose 6.5% a share.
Bird Box has also been a landmark for the organization. The thriller is now the most viewed original film the company has ever released. Netflix’s Roma has also received hype as a major contender for many academy awards, including best picture.
Netflix and Wall Street both continue to exhibit confidence that the streaming service will maintain its 130 million paid subscribers through the price surge and growing competition.