Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Netflix raises monthly subscription prices in U.S., Canada

Published 01/14/2022, 03:02 PM
Updated 01/14/2022, 06:49 PM
© Reuters. FILE PHOTO: A smartphone with the Netflix logo is seen on a keyboard in front of displayed "Streaming service" words in this illustration taken March 24, 2020. REUTERS/Dado Ruvic/File Photo

© Reuters. FILE PHOTO: A smartphone with the Netflix logo is seen on a keyboard in front of displayed "Streaming service" words in this illustration taken March 24, 2020. REUTERS/Dado Ruvic/File Photo

By Lisa Richwine

LOS ANGELES (Reuters) -Netflix Inc has raised its monthly subscription price by $1 to $2 per month in the United States depending on the plan, the company said on Friday, to help pay for new programming to compete in the crowded streaming TV market.

The standard plan, which allows for two simultaneous streams, now costs $15.49 per month, up from $13.99, in the United States.

Prices also rose in Canada, where the standard plan climbed to C$16.49 from C$14.99.

Shares of Netflix (NASDAQ:NFLX) gained nearly 3% to $533.84 on Nasdaq after Reuters broke the news of the price rises. They closed 1.3% higher at $525.69.

The increases, the first in those markets since October 2020, took effect immediately for new customers. Existing members will see the new prices in the coming weeks when they receive their monthly bills.

"We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members," a Netflix spokesperson said.

"We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always we offer a range of plans so members can pick a price that works for their budget," the spokesperson added.

The world's largest streaming service is facing the most competition ever from companies looking to attract viewers to online entertainment. Walt Disney (NYSE:DIS) Co, AT&T Inc (NYSE:T)'s WarnerMedia, Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) are among the rivals pouring billions into new programming.

Netflix has added customers despite prior price increases, which shows its members have been willing to accept higher costs, Evercore ISI analyst Mark Mahaney said.

"This is evidence that Netflix has pricing power," Mahaney said.

Netflix had said it would spend $17 billion on programming in 2021. The company has not disclosed spending for 2022.

The U.S. price of Netflix's premium plan, which enables four streams at a time and streaming in ultra HD, was increased by $2 to $19.99 per month. For Netflix's basic plan, with one stream, the cost rose by $1 to $9.99 per month.

In Canada, the premium plan rose by C$2 to C$20.99, and the basic plan was unchanged at C$9.99.

At $15.49 per month, the standard U.S. plan from Netflix now costs more than competitors. HBO Max, owned by AT&T Inc, is currently offering an $11.99-a-month promotion for 12 months.

The price of Walt Disney Co's Disney+ is $7.99 a month or $79.99 a year.

The United States and Canada is Netflix's largest region with 74 million streaming customers as of September 2021. The region accounted for nearly 44% of the company's revenue in 2021's third quarter, or about $3.3 billion.

Most of the company's recent pickup in subscribers has come from overseas.

© Reuters. FILE PHOTO: Small toy figures are seen in front of diplayed Netflix logo in this illustration taken March 19, 2020. REUTERS/Dado Ruvic/Illustration//File Photo

Netflix's subscriber growth slowed from a boom early in the COVID-19 pandemic but rebounded with help from global phenomenon "Squid Game," a dystopian thriller from South Korea released in September. Total global subscriptions reached 213.6 million.

The company's next subscriber report is due Thursday when Netflix posts quarterly earnings. Analysts project the company will report 8.5 million new sign-ups from October through December, according to Thomson Reuters (NYSE:TRI) I/B/E/S data, bringing its global subscriber base to 222 million.

Latest comments

Smart thinking 7% inflation and what will I pick first - food / gasoline for car ..or a higher Netflix subscription when lots of competitors are now cheaper? Nexflix to me is also very hit and miss on original shows - a few real hits but just as many if not more duds.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.