subscribers, prepare to pinch a few more pennies each month. The streaming service is raising prices for all 58 million of its U.S. subscribers, the Associated Press reports, in an effort to staunch its negative cash flow. Netflix has borrowed heavily as of late to fund its programming, and these price hikes are meant to offset these costs, as well as to finance its own original TV series and films.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement issued to the AP.
The cheapest plan now costs $9 a month, as opposed to $8 before. Netflix’s most popular package, which features high-def streaming on up to two different Internet-connected devices at once, is experiencing the largest price jump, moving from $11 to $13 a month. The premium plan (with ultra-HD, for all the high-rollers) is now $16 a month, up from $14.
This is the company’s first price increase that will affect all U.S. subscribers. The streaming giant has raised its rates four times since its launch 12 years ago, with the last occurring in 2017. The price jumps revealed today are the largest since Netflix’s video streaming service began, with subscribers seeing their charges increase by 13 to 18 percent in the U.S. The price changes will also affect customers in the 40 Latin American countries where they are billed in U.S. dollars (with the notable exceptions of Brazil and Mexico).
While investors are certainly celebrating after the company’s stock surged in Tuesday’s (Jan. 15) trading, Netflix users may be tempted to move to different streaming platforms that now offer comparable packages of content, including original and extant entertainment. Consumers can stream on Amazon Prime for $13 per month, or $120 for an annual membership, and Hulu’s ad-free service sets users back $12 a month. HBO, whose current streaming service costs $15 monthly, may see its offering broadened, according to AT&T’s WarnerMedia unit plans. And lest you’ve forgotten, Mickey is gearing up to keep us under his giant, gloved thumb when Walt Disney launches their streaming channel Disney+ later this year. The streaming market becomes more saturated by the day, and it remains to be seen whether Netflix can retain a loyal customer base.
New subscribers will be immediately affected by Netflix’s price increase, while current users will be hit with the change in the coming three months.
Reached for comment by Paste, a Netflix spokesperson said little beyond what the streamer had already told the AP: “We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members.”