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Will Higher Prices Tune Out Subscribers — Netflix

06 October 2017

The company's stock is up 2.69% to about $189.53 on Thursday, following the news that Netflix will be increasing the price of its subscription services to help cover its increasing content production budget.

The standard service, which allows customers to stream shows and movies in HD on up to two screens at once, is now priced at $10.99 monthly, up from $9.99.

The price for another plan that includes ultra-high definition, or 4K, video, is going up by 17 percent, to $14 from $12 a month.

Netflix plans to roll out the price increase in November for existing subscribers and is set to publicly announce the price increase to customers later this month.

The increase will be the first in two years for Netflix, although it won't seem that way for millions of subscribers.

Netflix is raising rates.

Netflix isn't giving anyone a break this time around.

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The price hikes only affect USA customers and will go into effect in November.

Get ready to shell out more for your Netflix. That option will remain $7.99, as it has since it launched in the U.S. in 2010.

But paying for exclusive TV series and films hasn't been cheap.

Netflix had earlier said it would spend over US$6 billion this year on original shows and expected to have negative free cash flow of US$2 billion to US$2.5 billion.

Netflix's selection of content changes from month to month as the service rotates out TV shows and movies while adding new ones.

Subscribers to the single, non-HD plan will not see a price increase.

Shares of the Silicon Valley-based company jumped more than four percent to $192.44 (R 2633.76) in trading following news of the relatively small price hike. Therefore, we believe that this price increase will likely be a revenue growth catalyst for the company. The basic plan, which only lets users watch on one screen at a time and doesn't offer HD, will remain the same price at $7.99.

Will Higher Prices Tune Out Subscribers — Netflix