Net­flix rais­ing prices for 58M US sub­scribers as costs rise

The Standard Journal - - ENTERTAINMENT - By Michael Liedtke AP Tech­nol­ogy Writer

SAN FRAN­CISCO — Net­flix is rais­ing its U.S. prices by 13 per­cent to 18 per­cent, its big­gest in­crease since the com­pany launched its stream­ing ser­vice 12 years ago.

Its most pop­u­lar plan will see the largest hike, to $13 per month from $11. That op­tion of­fers high-def­i­ni­tion stream­ing on up to two dif­fer­ent in­ter­net-con­nected de­vices si­mul­ta­ne­ously.

Even at the higher price, that plan is still a few dol­lars cheaper than HBO, whose stream­ing ser­vice charges $15 per month.

The ex­tra cash will help pay for Net­flix’s huge in­vest­ment in orig­i­nal con­tent and fi­nance the heavy debt it has as­sumed to ward off ri­vals such as Ama­zon, Dis­ney and AT&T.

This marks the fourth time that Net­flix has raised its U.S. prices; the last hike came in late 2017. But this is the first time that higher prices will hit all 58 mil­lion U.S. sub­scribers, the num­ber Net­flix re­ported at the end of Septem­ber.

Pre­vi­ously, Net­flix had con­tin­ued to of­fer a ba­sic, $8-a-month stream­ing plan while rais­ing rates on more com­pre­hen­sive plans with bet­ter video qual­ity and op­tions to watch si­mul­ta­ne­ously on dif­fer­ent de­vices.

This time, the price for the cheap­est plan is go­ing up to $9 per month. A pre­mium plan of­fer­ing ul­tra-high def­i­ni­tion will jump to $16 from $14.

The new prices will im­me­di­ately af­fect all new sub­scribers and then roll out to ex­ist­ing cus­tomers dur­ing the next three months. Cus­tomers in about 40 Latin Amer­ica coun­tries where Net­flix bills in U.S. cur­rency will also be af­fected, ex­cept­ing key in­ter­na­tional mar­kets such as Mexico and Brazil.

Net­flix had nearly 79 mil­lion sub­scribers out­side the U.S. as of Septem­ber.

Higher prices could alien­ate sub­scribers and pos­si­bly even trig­ger a wave of can­ce­la­tions. For in­stance, Net­flix faced a huge back­lash in 2011 when it un­bun­dled video stream­ing from its older DVD-by-mail ser­vice, re­sult­ing in a 60 per­cent price in­crease for sub­scribers who wanted to keep both plans.

Net­flix lost 600,000 sub­scribers af­ter that switch.

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