Health

Netflix raises monthly subscription prices in US, Canada

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 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 Co, AT&T Inc’s WarnerMedia, Amazon.com
Inc and Apple Inc 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.

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The US 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.

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 I/B/E/S data, bringing its global subscriber base to 222
million.

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