Netflix to raise prices

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Netflix on Tuesday (15 January) announced that it will raise its prices, with the increase constituting a jump of 13% to 18% – its highest price increase ever. The new prices take effect immediately for new customers but existing subscribers will see it take effect over the next three months. The standard plan — which offers HD video and allows users to watch from up to two devices at once — will be subjected to the largest price rise, percentage-wise, climbing from $10.99/month to $12.99/ month. Netflix last increased its prices in late 2017.

Wall Street analysts have backed the move with Seeking Alpha reporting that Piper Jaffray released a positive note on the prices hikes, while RBC Capital Markets sees a $1bn incremental boost to Netflix’s top line from the price increase in the US. Meanwhile, SunTrust says the move makes sense with the upcoming content slate coming from Netflix being very strong. The announcement saw the share price soar with Netflix closing Tuesday 6.5% higher.

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