Netflix is increasing the prices for two of its U.S. subscription plans, beginning next month, and saw its shares hit a record high, rising more than 5% for the day to finish at $194.39.
Investors and analysts said the company has more leverage and was wise to bump up prices as a way of partly offsetting its massive outlay on programming. Content chief Ted Sarandos this week said Netflix would spend about $7 billion on content in 2018 and sees no end to the stepped-up spending trend.
According to the streaming service’s signup page, the most basic plan remains $7.99 a month. But the mid-priced Netflix option enabling streaming on two devices at once has gone up by $1 to $10.99 a month, and the highest-end subscription, with high-definition streaming on up to four devices, is now $13.99, up from $11.99.
Netflix has faced a degree of backlash when it has hiked prices in the past, but as it keeps spending heavily to build a content arsenal — $7 billion was the company’s most recent projection for 2018 — consumers seem likely to take the increases in stride.
The company is scheduled to report quarterly earnings on October 16, which should offer a sense of its international drive for subscriptions as well as any sign of a ceiling for U.S. subscription levels.
Mashable first reported the price-hike news, noting that the increases are only in the U.S.