Due to the growing popularity of its video streaming service amid the lockdown caused by the coronavirus, Netflix is increasing most of its US prices by 8% to 13%.
Under the price increase measures implemented on Friday, the price of Netflix’s most popular American streaming program rose by $1 to $14 per month. A premium plan that allows more people to watch the service on different screens at the same time will now cost $2 per month and $18 per month. Netflix’s basic plan in the US is still $9 per month.
This is Netflix’s first price change in the United States since its launch..
New US subscribers will be charged a higher price immediately, and the increased price will affect existing customers in stages in the coming months.As of September, Netflix has 73 million subscribers in the US and Canada, most of which are located in the US
“[T]He said that despite any potential economic uncertainty, the company has a solid position in terms of competitive position and value proposition. ”
Netflix raised prices in Canada earlier this month, and then ended a 30-day free trial in the United States, Wall Street originally hoped to raise prices. And this streaming media company is setting off a boom because consumers have avoided home entertainment from the pandemic.
Netflix gained 28 million global subscribers in the first nine months of this year, which has surpassed the full-year growth of 2019. This year’s subscriber increase includes 5.4 million customers in the United States and Canada.
But this growth may test Netflix’s popularity, especially as the pandemic-induced recession intensifies and forces more American households to reduce spending.
After Netflix raised U.S. prices at the beginning of last year, from the end of March to the end of June, the number of users of streaming media services in the U.S. and Canada decreased by 130,000.
Netflix also faces more competition than ever before, including strong financial competitors such as Amazon, Apple, Walt Disney, and AT&T. Some of these plans are far less expensive than Netflix’s plans in the United States.
Disney’s rapidly growing streaming service charges $7 a month and provides access to a library of the most popular movies of all time.
Apple’s one-year streaming service only costs $5 a month. So far, Apple has provided relatively few selections of TV series and movies, but Apple is investing more in program production and streaming media bundles with other services. Its Apple One plan includes video, music, video games and online storage, and it costs $15 a month, which is only $1 higher than Netflix’s most popular standalone plan.
Netflix said in a statement: “We understand that people have more entertainment options than ever before, and we are committed to providing our members with a better experience.”
Higher prices should help boost Netflix’s profits, which is a prospect that investors like. But Netflix’s stock price fell more than 5% on Friday to close at $475.74..