Have Netflix? Get Ready to Pay More...
Streaming video giant Netflix (NASDAQ: NFLX) rolled out price increases for American customers today. Monthly subscription fees for the company's two costliest plans ticked up by a buck or two while the entry-level option held steady at $9 per month. Analysts saw these changes coming a month ago.
The new prices were discovered bytechnology newssite The Verge, which also contacted the company to confirm the pricing changes. Netflix has not officially announced the changes in press releases or Securities and Exchange Commission filings.
The basic plan has not changed at all, staying put at $9 per month for access to standard-definition video on a single screen. The popular standard plan, with two concurrent streams in high-definition, rose from $13 to $14 per month. The premium plan, which offers four simultaneous streams of ultra-high definition, jumped from $16 to $18 per month.
New subscribers are already facing the new price list while existing Netflix subscribers should see the changes take effect in the next billing statement.
Image source: Netflix.
Netflix's last domestic price increase took effect in January 2019. All three plans saw higher price tags that time, but Netflix left the basic option out of the changes this time. The company generally implements price changes on a market-by-market basis, so this is not a harbinger of higher prices on a global scale. For example, Canadian Netflix plans saw a similar slate of price increases three weeks ago.
Higher prices should boost Netflix's revenue, earnings, and cash flows over time, though the changes may also inspire some current users to cancel their subscriptions. Investors generally saw the domestic pricing update as a good thing, driving share prices more than 5% higher in a matter of minutes when The Verge published its findings.
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Anders Bylund owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.
