As its video streaming service rides a surge of increasing popularity despite coronavirus-fueled lockdowns, Netflix is raising much of its U.S. rates by 8 percent to 13 percent.
What is Netflix
Netflix is a subscription service on thousands of internet-connected platforms that includes a wide range of award-winning TV shows , movies, anime, documentaries, and more.
Whenever you can, you can watch as much as you want without a single advert, just for a low monthly fee. There is still something new to learn and every week there are new TV shows and movies added!
Netflix’s most successful U.S. subscription package is rising $1, to $14 a month under the rises imposed on Friday. A premium option that encourages more users to view the service concurrently on various devices will now cost $2 more per month at $18. The basic U.S. schedule for Netflix stands at $9 a month.
This is the first pricing shift in the U.S. for Netflix after a rise rolled out early last year.
The increased premiums will automatically be paid to all U.S. users, while the increases will reach current consumers in increments over the next six months. Netflix finished September with 73 million U.S. and Canadian users, with the vast majority located in the U.S.
This suggests that, despite any possible economic volatility, the company is secure in its strategic positioning and its value proposition, analysts at Raymond James wrote to investors in a report.
Since Netflix increased its rates in Canada earlier this month and then terminated free 30-day trials in the U.S., Wall Street was anticipating a price rise. And, as people sheltering at home from the pandemic turn online for content, the streaming industry is enjoying a surge of success.
During the first nine months of the year, Netflix added 28 million worldwide viewers, already eclipsing its growth for the full year of 2019. The subscriber gains this year represented an further 5.4 million clients in the U.S. and Canada.
But the rises which push the limits of the popularity of Netflix, especially if the recession driven by the pandemic deepens and causes more U.S. households to slash their spending.
The subscription service experienced a decrease of 130,000 users in the U.S. and Canada from the end of March to the end of June, after Netflix increased its U.S. rates early last year.
Netflix, like deep-pocketed competitors that include Amazon, Apple, Walt Disney and AT&T, is now facing more competition than ever. Several of those deals are much less pricey than the U.S. option for Netflix.
The rapidly rising subscription service from Disney costs just $7 a month for access to a library that features some of the most beloved movies of all time.
The year-old subscription service for Apple costs only $5 a month. Apple provides a comparatively limited range of TV shows and movies to date, but the company is investing more money on programming and bundling its offerings for streaming. It costs $15 a month for the Apple One service, which covers television, music , video games and online storage, or just $1 more than the most common stand-alone package from Netflix.
“We understand that people have more viewing options than ever and we are devoted to providing our members with an even greater experience,” Netflix said in a statement.
The increased rates should help raise the profits of Netflix, a chance that investors want. But the stock of Netflix dropped more than 5 percent in the overall market to close Friday at $475.74 in the midst of another down day.