Netflix hikes prices on subscription plans

January 15, 2019

As the old saying goes, “You pays your money and you takes your choice”—and that’s certainly true for Netflix.

The Los Gatos, California-based streaming video service has just raised prices for all of its subscription plans—a move that will enable the company to continue its aggressive spending on content in the face of stepped-up competition from rivals, according to a report by The Wall Street Journal.

Netflix will increase the price of its most popular plan by 18%—to $13 a month from $11. That plan allows users to stream from two screens at the same time. The most basic plan, which allows a single stream in standard definition, will go up one dollar, or 13%, to $9 a month.

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,” a Netflix spokesperson told the Journal.

The new rates will go into effect immediately for new customers and be applied to the accounts of existing customers in the next few months, according to a person familiar with the plans.

Netflix last raised prices in October 2017, when the standard plan increased $1, to $11 a month; and the premium plan went up $2,  to $14.

The increase in monthly subscriber fees comes as Netflix continues to spend heavily to woo talent to its streaming service. Already, it has cut long-term deals costing hundreds of millions of dollars with powerful Hollywood producers—among them, Shonda Rhimes and Ryan Murphy.

Indeed, the Journal reports, industry analysts expect Netflix this year will spend $12 billion on licensing and creating content, more than double what it spent just two years ago.

Research contact: joe.flint@wsj.com

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