Netflix has officially announced a price hike to its U.S. monthly subscriptions by 13 to 18 percent to finance its original content and international expansion.
In its first price increase since 2017, the streaming service will now charge $8.99 instead of $7.99 for its basic plan. Its most popular plan will go up from $10.99 per month to $12.99 for two HD streams. The Netflix premium package granting four simultaneous streams in high definition will increase from $13.99 to $ 15.99 per month. Netflix will inform all its existing subscribers for the price changes by e-mail and in the app.
The updated prices will affect the new subscribers immediately and will roll out to existing users in the next three months. According to Statista, Netflix has 58.46 million customers in the USA as of Q3 2018. Besides them, users in nearly 40 Latin American countries where the company bills in U.S. dollars will also be affected. However, the Netflix prices for Brazil and Mexico remain unchanged.
Nowadays, the competition on the streaming scene is becoming fierce. For example, HBO charges $14.99 per month. The British Hulu's no ads plan costs $11.99 per month. Furthermore, Amazon Prime clients pay either $13 per month or $120 for Amazon's streaming service annual subscription.
In addition to that, in 2019 two new players will join the market. Walt Disney has been working on its streaming channel Disney+ and is expected to pull out its content from Netflix. At the same time, AT&T's WarnerMedia is preparing to launch a streaming service in late 2019 to feature movies and TV series from WarnerBros. Studio. Apple is also rumored to join the niche. The intensified competition has prevented Netflix from raising enough capital to cover all its programming and business expenses.
In 2018, Netflix spent nearly $13 billion on original programming. Among the most popular releases were ''Bird Box'', ''Roma'', the TV shows "13 Reasons Why," "Orange is the New Black" and "Marvel's Daredevil." The company reportedly agreed to pay $100 million for the right to keep streaming ''Friends'' in 2019.
The Netflix corporate strategy to invest in original content had paid off last Sunday when the streaming service won five Golden Globes. ''The Kominsky Method'' took home two Golden Globes for best performance by an actor in a television series, musical and best television series, musical or comedy. The BBC production ''The Bodyguard'' which Netflix distributes outside of the UK and Ireland, won the award for best performing actor in a drama TV series. One of the rumored Oscar front-runners, the Mexican movie ''Roma'', won the best director of a motion picture award and best motion picture in a foreign language.
Would you cancel your Netflix subscription now?