Netflix hikes costs in US and Canada, shares slam

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Netflix hiked monthly prices for its U.S. streaming service, sending the stock up as much as over 3% during Friday trading.

Netflix stock eventually rose 1.25% to close at $525.69 on Friday.

The monthly cost for the basic plan went from $1 to $9.99, the standard plan went from $13.99 to $15.49, and the premium plan went from $17.99 to $19.99, according to Netflix’s website. Canadian prices also rose.

A Netflix spokesman confirmed the change. “We are updating our prices so we can continue to offer a wide range of quality entertainment options,” the spokesman said in a statement.

Netflix has hiked prices in recent years and is part of the company’s long-term strategy. Netflix previously increased prices for US customers in 2019 and 2020.

Wall Street has relied on Netflix to raise prices when subscriber growth slows. Netflix’s price increases also reflect the company’s confidence that its plans are anchored in the lives of its customers and they won’t cancel or churn because of price increases.

Netflix said on Friday that customers will receive an email about the price increases 30 days before they see the increase.

Netflix is ​​facing more competition than ever, particularly from newer streamers like Disney+, HBO Max, Amazon Prime Video, and Apple TV+. Netflix said last fall that it had over 213 million subscribers around the world, which is much higher than the number of subscriptions its new competitors have. As a result, Netflix has invested heavily in producing content for its service and expects to spend $17 billion on content in 2021.

Netflix will report quarterly earnings next week.

FIX: Netflix price change is impacting customers in the US and Canada. The affected region was incorrectly stated in a heading in an earlier version of this article.

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