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.