Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Netflix raises prices for U.S. subscribers

Stock MarketsJan 15, 2019 06:27PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. The Netflix logo is seen on their office in Hollywood, Los Angeles 2/2

By Vibhuti Sharma

(Reuters) - Netflix Inc (O:NFLX) is raising monthly fees for its U.S. subscribers by between 13 percent and 18 percent, the video streaming pioneer's first price increase since 2017 as it spends heavily on original content and international expansion.

Prices for its popular standard plan, which allows streaming on two devices at the same time, will rise to $12.99 per month from $10.99, the company said in a statement.

Netflix shares rose 6.5 percent to close at $354.64, adding to their 30 percent rise so far this year.

The company's top-tier plan, which allows streaming on four screens in high definition, will increase to $15.99 from $13.99 per month, while the fee for its basic plan will rise to $8.99 from $7.99.

In comparison, AT&T Inc's (N:T) HBO Now streaming service charges $14.99 per month, while Hulu's no-advertisements plan is priced at $11.99 per month.

"It highlights that Netflix has pricing power and even after the increase it remains a very cheap entertainment alternative," Pivotal Research Group analyst Jeff Wlodarczak said.

Netflix has been spending billions to bolster its original content, which boasts award-winning shows such as "The Crown," "Black Mirror" and "Wild Wild Country" to fend off intensifying competition from players such as Amazon.com's (O:AMZN) Prime Video service and Hulu. The company reported it had 137 million customers at the end of September.

The price hikes are expected to fetch Netflix hundreds of millions of dollars, ahead of the launch of streaming services from AT&T and Walt Disney Co (N:DIS).

While aggressive spending - a planned $8 billion in 2018 - has led to a surge in subscriber growth, its debt doubled to $6.50 billion in 2017 from $3.36 billion in 2016.

The company is expected to have a debt level of $8.33 billion in 2018, according to Daniel Morgan, senior portfolio manager at Synovus Trust Co, which owns 15,019 shares of Netflix.

Netflix is scheduled to report its fourth-quarter results after market close on Thursday.

"With Netflix frequently tapping the debt markets on several recent occasions, the price hike could help ease concerns with a growing deficit on free cash flow to fund a likely continued escalation in Netflix's content spending, which likely topped $13 billion in 2018," CFRA analyst Tuna Amobi said.

Netflix raises prices for U.S. subscribers
 

Related Articles

Deutsche Post names Tobias Meyer CEO from 2023
Deutsche Post names Tobias Meyer CEO from 2023 By Reuters - Dec 08, 2021

BERLIN (Reuters) - Deutsche Post (OTC:DPSGY) said on Wednesday that Tobias Meyer will take over as new chief executive in May 2023 from long-serving boss Frank Appel, whose...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Ghoda Sandrokottos
Ghoda Sandrokottos Jan 15, 2019 12:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Better unsubscribe it !
Andrew Huang
Andrew Huang Jan 15, 2019 11:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
free movie better and newest than Netflix, for what spend money ....
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email