Netflix Jack Up Prices By Up To 18%
Netflix is jacking up prices in their biggest market by up to 18%, at this stage it’s not known whether Australian subscribers will be hit.
The sharemarket liked the news that the price rises which range between 13% and 18% depending on the planwill have on revenues with Netflix stock climbing 6.5% overnight.
The shares had already been on a tear, up more than 40 percent since Christmas Eve after drifting lower from a June record.
Investors believe that Netflix subscribers will continue to pay up for the company’s original programming and library of movies and shows — even if they need to pay more. While subscriber growth slowed after a 2015 price increase, a 2017 increase didn’t cause a blip as Netflix added 24 million customers that year.
That bodes well for the company, since its vast spending on original productions like “Stranger Things,” “The Crown” and current buzz magnet “Tidying Up With Marie Kondo” shows no signs of letting up. Netflix said in October it expected to burn through about $3 billion in cash for 2018.
This is Netflix second increase in less than two years and is the most significant since it launched streaming video in 2007.
In the past Netflix has lifted prices in Australia following a USA price rise.
The company is increasing the cost of its standard plan in the US from $10.99 to $12.99 a month.
A source said that Countries outside the US can also “expect increases”.
At this stage Netflix is saying that the move was not an indication of global plans.
Netflix said: “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.”
The increase comes as the firm is spending heavily on original material.
It is also facing mounting competition, as companies such as Disney and NBCUniversal announce their own plans to launch streaming services.