Netfl ix raising U. S. streaming prices amid booming growth

Netf lix is raising most of its U. S. prices by 8% to 13% as its video streaming service rides a wave of rising popularity spurred by governmentimposed lockdowns that corralled people at home during the fi ght against the pandemic.

The increases imposed Friday boost the cost of Netfl ix’s most popular U. S. streaming plan by $ 1 to $ 14 per month while a premium plan that allows more people to watch the service on different screens simultaneously will now cost $ 2 more at $ 18 per month. Netfl ix’s basic U. S. plan remains at $ 9 per month. It marks Netf lix’s first price changes in the U. S. since an increase rolled out early last year.

New U. S. subscribers will be charged the higher prices immediately while the increases will aff ect existing customers in phases during the next few months. Netfl ix ended September with 73 million subscribers in U. S. and Canada, with the overwhelming majority located in the U. S.

The move had been widely expected after Netf lix raised its prices in Canada earlier this month and then ended free 30- month trials in the U. S.

Netf lix’s price hike comes amid a surge in worldwide growth as efforts to contain the novel coronavirus closed down restaurants, theaters and other entertainment venues. The Los Gatos, California, company gained 28 million worldwide subscribers during the fi rst nine months of the year, already eclipsing its growth for the entire year of 2019. This year’s subscriber increases included an additional 5.4 million customers in the U. S. and Canada.

But the price increases may test the bounds of Netfl ix’s popularity, especially if the pandemicdriven recession deepens and forces more U. S. households to curtail their spending.

After Netfl ix raised its U. S. prices early last year, the streaming service suff ered a decline of 130,000 subscribers in the U. S. and Canada between from the end of March to the end of June.

Netf lix is also facing more competition than ever, including deep- pocketed rivals that include Amazon, Apple, Walt Disney and AT& T. And several of those are far less expensive than Netfl ix’s U. S. plan.

For instance, Disney’s rapidly growing streaming service charges just $ 7 per month for access to a library that includes some of the most beloved fi lms of all time. Apple’s year- old streaming service costs just $ 5 per month for a relatively small selection of TV series and fi lms, but the iPhone maker is trying to extend its reach by pouring more money into programming and bundling with its some of its other services. For instance, a plan that includes video, music, video games and online storage is being off ered for $ 15 per month, or just a $ 1 more than Netf lix’s most popular standalone plan.

“We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members,” Netfl ix said in a statement. “We’re updating our prices so that we can continue to off er more variety of TV shows and fi lms.”

The higher prices should help lift Netfl ix’s profi ts, a prospect that investors like. But Netflix’s stock fell more than 5% to $ 475.75 in Friday’s afternoon trading amid a broad market sell- off. Netf lix’s shares have climbed by nearly 50% so far this year, thanks largely to its robust growth amid the pandemic.