Streaming video service Netflix Inc on Thursday raised monthly charges in the United States for its standard and premium subscription plans, a move that sent the company’s shares climbing nearly 5 per cent.
Netflix increased the cost of its standard subscription by $1 a month to $14, and the price for the premium tier rose by $2 per month to $18. The standard plan, the company’s most popular, enables two streams at the same time, while the premium plan allows for four simultaneous streams.
The price increase was the first for U.S. customers since January 2019.
Shares of Netflix jumped 4.8 per cent to $509.53 in afternoon trading on Nasdaq.
Netflix, the world’s dominant streaming service, enjoyed a boom in subscriptions at the beginning of the year as viewers around the world were told to stay at home to help fight the coronavirus pandemic. The company expects to end 2020 with more than 200 million streaming subscribers around the world, with 73 million of those from the United States and Canada.
It also is facing a growing list of competitors including Walt Disney Co’s Disney+, HBO Max from AT&T Inc and Apple Inc’s Apple TV+.
After the company’s earnings report last week, Chief Operating Officer Greg Peters said the company saw an opportunity to increase prices in countries “where we’ve delivered that extra value.”
On Thursday, a Netflix spokesperson said the company was raising prices “so that we can continue to offer more variety of TV shows and films – in addition to our great fall line up.”
Netflix’s basic plan, which allows only one stream at a time, will remain at $8 a month in the United States.
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