Netflix, one of the world’s top media streaming platforms, said Friday it is raising the prices on its plans in the United States and Canada.
In the US, the subscription price for the standard plan is increasing $1.50 to $15.49. The basic plan is rising $1 to $9.99, and the premium plan is rising $2 to $19.99
In Canada, Netflix’s standard plan price is increasing $1.50 to $16.49 Canadian. The premium plan is rising $2 to $20.99 Canadian. The basic plan will remain unchanged.
Netflix provided a statement to CNN Friday to explain its choice to raise pricing, something the company hasn’t done since October 2020.
“We understand people have more entertainment choices than ever, and we’re committed to delivering an even better experience for our members,” a Netflix (NFLX) spokesperson said. “We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always, we offer a range of plans so members can pick a price that works for their budget.”
Netflix stock was up about 2% following the news of the price hike. It was announced just one week before the company releases its fourth-quarter earnings.
The reason behind the company’s move is pretty simple. Netflix has spent billions of dollars on content. However, as streaming becomes more integral to entertainment, companies like Netflix tend to slow. As companies reach most prospective customers in a given market, attracting new subscribers gets harder.
Raising prices on current customers is an easy way to increase revenue as growth slows.
According to October’s earnings report from Netflix, it added 4.4 million subscribers, bringing its global subscriber number to 213.5 million. The growth followed two consecutive slower quarters of growth and revenue for the streaming media company.
The same report from October said that Netflix added roughly 70,000 subscribers in the US and Canada. An improved trajectory from a loss of subscribers in the second quarter, but up only about 1 million subscribers from year-earlier totals in those countries.
The company said it has 74 million members in the US and Canada. However, as the company reaches saturation levels in those markets, growth has been slower.