Netflix today announced that it is going to raise its subscription fees in the U.S. by 13 percent to 18 percent. Netflix had last hiked its subscription fees in 2017 but that was only for its HD and 4K Premium plans.
This time around, the price increase will affect all 58 million Netflix subscribers in the U.S. The cheapest Netflix ‘Basic’ plan which currently costs $8/month will increase to $9/month after the hike. The company’s most popular plan, HD Standard, will cost $13 instead of $11 that it currently costs. The 4K Premium plan will see its monthly fees jump from $14 to $16.
This is the biggest price hike from Netflix since it came into existence 12 years ago.
The new subscription rates will be applicable effective immediately for new subscribers and roll out to existing subscribers over the next three months. Apart from the U.S., 40 other Latin American countries where Netflix charges its customers in US currency will also be affected by this change. Key Netflix markets like Mexico and Brazil will not be affected by this price hike though.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement.
Netflix has been producing a lot more original content recently and it needs more money to fund them. The streaming service has also taken on a huge debt ($12 billion+) to better compete with other streaming services from giants like Disney, Amazon, and AT&T. With competition between streaming services heating up every passing year, Netflix will have to come up with more innovative ways to fund its production house instead of hiking subscription fees. Netflix now risks alienating a section of its subscriber base if it hikes its subscription fees any further.
[Via AP News]