Netflix is raising prices for its subscription plans in the US and Canada

The broadcast media company said Friday it is raising prices from its standard plans in the United States and Canada.

In the US, the subscription price for the Standard plan went up $1.50 to $15.49. The basic plan increased from $1 to $9.99 and the premium plan increased from $2 to $19.99

In Canada, the price of the standard Netflix plan also increased by $1.50 to CAD 16.49. The $2 premium plan went up to CAD$20.99. Her basic plan has not changed.

Explaining its decision, Netflix submitted a statement to CNN matching its suspension from October 2020, the last time it raised its prices.
“We understand that people have more entertainment options than ever before, and we are committed to providing a better experience for our members,” A Netflix (NFLX) The official spokesperson said. “We are updating our rates so we can continue to offer a variety of high-quality entertainment options. As always we offer a range of plans so members can choose the right price for their budget.”

Netflix stock rose nearly 2% after the news.

The price increase comes a week before the streaming company is due to announce its fourth-quarter earnings.

But the reason for the company’s move is very simple: It has been spending billions of dollars on content, and as streaming becomes more and more an integral part of the entertainment landscape, the growth of companies like Netflix tends to slow and attracting new subscribers becomes more difficult.

At this point, the revenue has to come from somewhere. Raising prices on consumers is an easy way to get them.

Case in point: Netflix said in October that it had added 4.4 million subscribers, bringing its global subscriber count to 213.5 million — a good but not astounding total. This came after two consecutive quarters of stagnation for the company.

Netflix also reported in those earnings that it had added nearly 70,000 subscribers in the United States and Canada. This was an improvement from the loss of subscribers in the second quarter, but only an increase of about 1 million subscribers from the previous year’s total in those countries.

The company said it has 74 million members in the United States and Canada, but that growth in those regions is becoming saturated.

Reuters was the first to report the price hike.

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