LOS ANGELES, Jan 14 (Reuters) - Netflix Inc. has increased its monthly subscription price in the United States from $1 to $2 a month, depending on the plan, the company said on Friday, to compete in crowded streaming To help pay for new programming. TV market.
The Standard plan, which allows for two simultaneous streams, now costs $15.49 per month, up from $13.99 in the United States.
Prices also went up in Canada, where the Standard plan climbed from C$14.99 to C$16.49.
Shares of Netflix on the Nasdaq rose nearly 3% to $533.84 after Reuters broke the news of the price hike. They closed up 1.3% at $525.69.
The increase in those markets, the first since October 2020, took effect immediately for new customers. Existing members will see the new prices when they receive their monthly bills in the coming weeks.
"We understand that people have more entertainment options than ever before and we are committed to providing an even better experience for our members," a Netflix spokesperson said.
The spokesperson said, “We are updating our prices so that we can continue to offer a variety of quality entertainment options. As always, we offer a variety of plans so that members can choose a price that works for their budget. can."
The world's largest streaming service is facing the most competition ever from companies that are vying for online entertainment. Walt Disney Co (DIS.N), AT&T Inc's (T.N) WarnerMedia, Amazon.com Inc and Apple Inc (AAPL.O) are among rivals that are investing billions in new programming.
Evercore ISI analyst Mark Mahaney said Netflix has added subscribers despite prior price hikes, indicating that its members are willing to accept the higher cost.
"This is proof that Netflix has pricing power," Mahane said.
Netflix said it would spend $17 billion on programming in 2021. The company has not disclosed the expenses for 2022.
The US price of Netflix's Premium plan, which enables up to four streams at once and streaming in Ultra HD, was increased from $2 to $19.99 per month. For Netflix's basic plan, with a single stream, the cost increased from $1 to $9.99 per month.
In Canada, the Premium plan increased from C$2 to C$20.99, and the Basic plan remained unchanged at C$9.99.
At $15.49 per month, Netflix's standard U.S. The plan is now higher than that of the competitors. HBO Max, owned by AT&T Inc. (TN), is currently offering a $11.99-a-month promotion for 12 months.
Walt Disney Co's (DIS.N) Disney+ costs $7.99 per month or $79.99 per year.
The United States and Canada are Netflix's largest regions, with 74 million streaming subscribers as of September 2021. The sector contributed about 44% of the company's revenue in the third quarter of 2021, or about $3.3 billion.
The company's recent pick in customers has mostly come from overseas.
Netflix's subscriber growth slowed sharply at the start of the COVID-19 pandemic, but rebounded with the help of the global phenomenon "Squid Game," a dystopian thriller from South Korea released in September. The total global membership reached 213.6 million.
The company's next customer report is due on Thursday when Netflix posts quarterly earnings. According to Thomson Reuters I/B/E/S data, analysts estimate the company will report 8.5 million new sign-ups from October to December, bringing its global customer base to 222 million.