Beginning today, Netflix has increased its standard subscription to $10 per month. While existing subscribers on the two-screen plan will receive a grace period, the price increase goes into effect today for new subscribers in the U.S., Canada and parts of Latin America. The price for the one-screen standard definition plan ($8 per month) and four-screen “premium” plan ($12) will not change. The video streamer explained the increase is to offset the cost of adding new TV shows and movies.
Netflix has added 450 hours of original and “first-run” (meaning that its the first place to watch in a particular territory) content, Netflix spokeswoman Anne Marie Squeo told CNET. While it’s best known for original series like House of Cards and Orange is the New Black, the streamer has dramatically broadened its Netflix-exclusives this year. New, noteworthy acquisitions for Netflix include a $30 million deal for Brad Pitt’s War Machine, the critically-acclaimed Narcos, new episodes of British sci-fi show Black Mirror and even the streamer’s first series from Italy.
Passing along more of the original content’s cost to its subscribers, which are currently at 65 million, certainly has its downsides. Amazon, which recently beat out Netflix at the Emmys, remains a strong competitor to the streamer. Hulu is also working on strengthening its brand. But, apparently, Netflix isn’t worried about losing subscribers from the price increase. “It feels like they are confident in how well they are growing and that they have the consumer love to push the price,” stock analyst Rich Greenfield told Bloomberg.
After falling early on, Netflix stock finished strong today, up over 6 percent on the news as investors apparently see more profits ahead with the increase.
Netflix last increased the monthly price for its standard subscription in May 2014 to $9. At that time, the streamer also added the new basic tier which offers viewing capabilities on just one screen in standard definition for $8 per month.
This time around, it (likely) isn’t going to add another lower-priced tier. Only time will tell if the price increase deters new subscribers.