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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% 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.
(Reporting by Eva Mathews in Bengaluru and Lisa Richwine in Los
Angeles; Editing by Maju Samuel and David Gregorio)
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