Netflix Announces Rate Increase

California. โ€” Netflix will increase most of its prices in the United States by 8 -13% as its streaming service goes through a huge increase in popularity, driven by government-imposed closures that have cornered people at home during the fight against the pandemic.

The increase implemented on Friday is for Netflixs most popular streaming service that will raise $1 to $14 a month while the premium plan that allows more people to see the service on different screens will cost $2 more than $18 a month. The Netflix Basic Plan is maintained at $9 per month. This is the first price change on Netflix since last year when there was another increase.

New subscribers in the United States will have to pay the highest prices immediately, while increases will affect previous subscribers in phases over the coming months. Netflix ended September with 73 million subscribers in the United States and Canada, most of which are located in the United States.

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The measure was widely expected after Netflix increased its prices in Canada this month and ended the tests free of 30 days in the United States.

Netflixs price rise comes amid global growth for the company as efforts to contain the new coronavirus have closed down restaurants, cinemas and other entertainment sites. The Los Gatos, California company won 28 million subscribers worldwide during the first nine months of the year, eclipsing all its 2019 growth. This year the increase in subscribers included 5.4 million additional customers in the United States and Canada.

But rising prices could test the limits of Netflixs popularity, especially if the recession unleashed by the pandemic intensifies and forces more households in the US to limit their spending.

After Netflix increased its prices in the United States last year, the streaming service declined by 130,000 subscribers in the United States and Canada between the end of March and the end of June.

Netflix also faces more competition than ever, including very rich rivals like Amazon, Apple, Walt Disney and AT&T, and several of them are significantly cheaper than Netflixs US plan.

For example, the fast-growing Disney streaming service charges only $7 per month for access to a library that includes some of the most popular movies of all time.

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Apple streaming service, which already has a year, costs only $5 a month for a relatively small selection of series and movies but the manufacturer is trying to expand its reach by spending money on programming and its relationship with some of its other services. A plan that includes video, music, video games and storageis offered for $15 a month, only $1 more than Netflixs most popular solo plan.

โ€œ We understand that people have more entertainment options than ever before and we are committed to delivering an even better experience for our members,โ€ Netflix said in a statement. โ€œWe are updating our prices to continue offering more variety of programs and movies.

Higher prices should help increase the profits of Netflix, a prospect investors like. However, Netflix shares fell more than 5% to $475.74 on Friday at the close of the stock exchange amid widespread market sale. Netflix shares have increased almost 50% this year, mainly thanks to its robust growth in the pandemic.