One chart shows why shareholders are so happy about Netflix's price increase

Netflix raised its prices for US subscribers on Thursday and its stock took off, hitting an all time high of $US194.39 per share by the end of the day. The price bump took the standard tier up to $US10.99 from $US9.99, and the premium tier to $US13.99 from $US11.99. The entry level $US7.99 plan will not change. Subscribers are likely to grumble, but the stock increase indicates investors are confident the company won’t see a decline in subscription numbers.

Netflix has raised its prices before, and as we can see in this chart from Statista, subscriber growth rates slowed but never decreased as a result. Netflix has consumers hooked, and its content is only likely to get better. According to content boss Ted Sarandos, the company will spend almost $US7 billion on content next year, and has recruited TV power players like Shonda Rhimes to produce original shows.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at