Netflix Inc. plans to raise its streaming subscription prices in the US and Canada for a second time during the COVID-19 pandemic, resulting in tremendous early subscriber growth for the company that slowed in 2021.
The website was updated with new price lists on Friday. The standard US plan, which allows for two streams in high-definition quality, is now $15.49 per month, down from $13.99 per month. The other two main subscription plans in the US increased by $2 per month, with the basic plan going from $7.99 to $9.99 and the premium plan going from $17.99 to $19.99 -dollar rose. In Canada, the standard plan is set to increase from C$14.99 to C$16.49.
"We understand people have more entertainment options than ever before, and we're committed to providing our members with an even better experience," a Netflix spokesman told Reuters, which broke the news first. "We're updating our pricing so we can continue to offer a wide variety of quality entertainment options. As always, we offer a range of plans so members can choose a price that fits their budget.”
The company, which spent $17 billion on programming in 2021, hasn't revealed how much it plans to spend this year.
Netflix previously raised prices in October 2020, increasing the standard plan from $12.99 to $13.99 and a plan that allows for up to four simultaneous streams from $15.99 to $17.99. That surge came just as subscriber growth for Netflix began to slow, after the company added more than 25.8 million new subscribers in the first half of 2020, when the pandemic first hit and led to a wave of protection orders had.
For the full year following that explosion, from mid-2020 to mid-2021, Netflix added less than 17 million net new subscribers and less than 1 million on a net basis in North America. The company is basing its growth on international markets, even cutting prices in India, where competition from Amazon.com Inc.
and Walt Disney Co.
Netflix executives forecast for the holiday quarter was 8.5 million net new subscribers, but some analysts believe the forecast was overly optimistic. The streaming service is expected to report fourth-quarter results on Thursday, January 27.
Netflix shares received a warm reaction to news of higher consumer prices, rising from around $515 per share to more than $530 at midday Pacific time when Reuters broke the news. The stock has struggled under the weight of declining subscriber growth, gaining 6.1% over the past year as the S&P 500 index
has increased by 22.8%.