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Netflix Now Costs More Than Ever Before, All US Plan Prices Increased

Netflix Now Costs More Than Ever Before, All US Plan Prices Increased

According to a report made by The Associated Press, "Netflix is raising its us prices by 13 percent to 18 percent, its biggest increase since the company launched its streaming service 12 years ago".

The rate increases will take immediate effect for new subscribers, though the company's 58 million existing U.S. customers will be transitioned to the new subscription prices over the next three months.

Netflix announced today that it is raising the price of its streaming video service by 13 to 18 Percent in the United States. And it's premium plan will jump from $14 a month to $16 a month. New subscribers will pay the higher prices immediately while current Netflix members will see the new pricing roll out over the next three months.

Netflix smartly raises prices a little bit at a time, so $1 here or $2 there doesn't seem too significant. "Even at the higher price, that plan is still a few dollars cheaper than HBO, whose streaming service charges $15 per month".

Let's also not forget that Netflix can't as easily acquire the rights to stream content from other media companies.

Netflix says it will use the cash to "continue investing in great entertainment".

It will take some time to gauge consumer reaction to the higher prices, but Wall Street is already thrilled. The streaming service remains in debt, with an annual spend north of $12 billion, but the idea behind this strategy is to then slowly ramp down production of original content after an extensive library has been amassed. Some efforts, such as horror flick "Bird Box" and romantic comedy "To All the Boys I've Loved Before" have found overwhelming success, but many others have tanked.

Netflix increased prices in many markets last July when it introduced a new Ultra plan - the only way to enjoy content in 4K, and on up to four devices simultaneously. The last time Netflix increased its prices was in late 2017.

Netflix's stock price gained $21.70 a share, or 6.5%, to $354.64 a share Tuesday following the company's announcement of the subscription-fee increases.

According to Netflix, existing members will be notified by email and within the Netflix app 30 days before the new prices are applied to their accounts. The firm is due to report earnings to investors this week.

Netflix has only announced price hikes for US users.


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