Netflix is raising prices in the US more—and more frequently—than before.
The streaming-video service raised the price for new signups today (Jan. 15) by 13% to 18%, the largest increase among its streaming plans in the US, where it has more than 58 million subscribers. The hikes come as the company invests more in high-end original series and movies, as well as marketing and technology.
Netflix has hiked its prices in the US only a handful of times since introducing its standalone streaming plan in November 2010. Recently, it began raising rates more regularly. The last price hike was announced in October 2017, roughly 15 months ago.
Source: Company announcements and news reports
The price of a standard plan in the US, which launched at $8 per month in 2010, has gone up more than 60% since.
Unlike previous price hikes, which only affected some plans, the new hike will sweep across all of Netflix’s streaming offerings in the US. The price of Netflix’s basic plan, which supports standard formats and viewing on one screen at a time, is going up by $1 to $9 per month. The monthly cost of the standard plan, which supports high definition and viewing on two screens at a time, is going up by $2 to $13. And the premium plan, which allows for streaming on up to four devices at time, will cost $16 per month, $2 more.
People who sign up for Netflix will see the new prices starting today in the US. The price hikes will roll out to existing US customers in the next few months. Current subscribers will be notified via email and in the Netflix app 30 days before the price raises hit their accounts.
Around 40 countries in the Caribbean and Latin America where Netflix bills in US dollars will also be affected, including Uruguay, Barbados, and Belize. Key Latin American markets like Mexico and Brazil are billed in local currencies and therefore won’t see prices go up.
The rate hikes come as Netflix invests billions each year in original content like the upcoming season of Stranger Things and movies like Martin Scorcese’s The Irishman; talent like TV creators Shonda Rhimes and Ryan Murphy; and new technology, like the choose-your-own-adventure format underpinning Black Mirror‘s “Bandersnatch.” Last year, the company spent $10 billion on content and marketing, and started producing more original programming itself rather than licensing the shows and moves from other studios. Self-producing content generally requires more investment upfront than licensing does.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,” the company said in a statement to Quartz.
Shares of Netflix were trading up from yesterday’s close around 6% at the time of this writing, at $351.70. News of the price hikes—first reported by the Associated Press—came two days before Netflix was scheduled to report earnings for the fourth quarter of 2018.
However, Netflix is also raising prices at a time of increasing competition for viewers in the US. Streaming rivals like Amazon Prime Video and Hulu are also investing more in content and technology to catch up to Netflix, and media giants like Disney and WarnerMedia are preparing to launch streaming services of their own this year. Some people on social media expressed frustration with the raising rates today.
Netflix’s streaming subscriber base has swelled to more than 58 million members in the US as of September 2018. But growth has started to taper off now that so many people in the US already have Netflix. International subscribers have become the company’s fastest growing group and made up about 58% of Netflix’s member base, after eclipsing the US in 2017.