Netflix stock price is soaring over 3% to a new record high this morning after announcing plans to raise the price of its most popular U.S. service plan by 10 percent as the streaming video giant looks to help pay for its ambitious budget for TV shows and movies.
Netflix will be raising prices on its middle and top tier plans in the U.S. starting in November. Subscribers who currently pay for the standard $9.99 service will be charged $10.99. The price of the premium tier will rise from $11.99 to $13.99.Good news for people on the basic $7.99 plan—that price is staying put, for now.
The U.S.-only price hikes will begin to go into effect in November, varying depending on individuals’ billing cycles. Starting on Oct. 19, subscribers will be notified and given at least 30 days notice about the increase.Netflix declined to make any executives available for interview but did release a statement regarding the price increases:
“From time to time, Netflix plans and pricing are adjusted as we add more exclusive TV shows and movies, introduce new product features and improve the overall Netflix experience to help members find something great to watch even faster.”
And shareholders love it…
Netflix has been spending billions of dollars on TV shows and movies for its online video service and has been borrowing to help finance their development (twice as much as Amazon).
We wonder if the price hike is due to the fact that people are finally starting to worry about this…