Netflix is raising monthly fees for its US subscribers by between 13% and 18%, the video streaming pioneer’s first price increase since 2017 as it spends heavily on original content and international expansion.
Prices for its popular standard plan, which allows streaming on two devices at the same time, will rise to $12.99 per month from $10.99, the company said in a statement.
Netflix shares rose 6.5% to close at $354.64 on Wall Street last night, adding to their 30% rise so far this year.
The company’s top-tier plan, which allows streaming on four screens in high definition, will increase to $15.99 from $13.99 per month, while the fee for its basic plan will rise to $8.99 from $7.99.
In comparison, AT&T HBO Now streaming service charges $14.99 a month, while Hulu’s no-advertisements plan is priced at $11.99 a month.
Prices here have not changed, and Netflix said the move was not an indication of its global plans.
Analysts said the increase highlights that Netflix has pricing power and even after the increase it remains a very cheap entertainment alternative.
Netflix has been spending billions to bolster its original content, which boasts award-winning shows such as “The Crown,” “Black Mirror” and “Wild Wild Country” to fend off intensifying competition from players such as Amazon.com’s Prime Video service and Hulu.
The company reported it had 137 million customers at the end of September.
The price hikes are expected to make Netflix hundreds of millions of dollars, ahead of the launch of streaming services from AT&T and Walt Disney.
While aggressive spending – a planned $8 billion in 2018 – has led to a surge in subscriber growth, its debt doubled to $6.50 billion in 2017 from $3.36 billion in 2016.
Netflix is scheduled to report its fourth-quarter results on Thursday night.
