Greg Peters, the company’s chief product officer, said on Netflix’s quarterly investor interview last October that “we earn the right to increase price a bit” if the company keeps delivering on customer expectations. Wall Street analysts have believed Netflix has demonstrable leeway to safely raise fees without the risk of significant backlash. customers as of the end the third quarter of 2018, with a worldwide total of 137.1 million streaming members. The exact timing will depend on a specific member’s billing cycle. 17.Īccording to Netflix, existing members will be notified by email and within the Netflix app 30 days before the new prices are applied to their accounts. Netflix is scheduled to report Q4 2018 results on Thursday, Jan. It remains to be seen how the new price increases affect subscriber growth heading into 2019. Netflix last raised rates in the fourth quarter of 2017 - two years after its previous hike - and faced minimal cancellations and no slowdown in net subscriber additions. It’s also continuing to burn cash, and most recently projected negative cash flow of more than $3 billion for 2018 (versus negative free cash flow of $2 billion a year prior). 30, up from $6.50 billion at the end of 2017. To fund its content-spending binge, Netflix has raised billions in new debt: It reported $8.34 billion in long-term debt as of Sept. The company is looking to boost top-line revenue to offset its ballooning content costs, which were projected to hit $13 billion on a gross basis in 2018. Netflix shares rose up as much as 6.8% in morning trading Tuesday on news of the price increases, with investors bullish on the evidence of its growing market clout. “We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” a company spokeswoman said in a statement. However, the rate hikes will not take effect (for now) in the region’s biggest markets, Mexico and Brazil. dollars, including Uruguay, Barbados, and Belize. Netflix’s price increases also will extend to about 40 countries in Latin America where it bills in U.S. Existing subscribers will be moved to the new pricing plans “over the next few months,” according to the company. The new prices, which are the biggest fee hikes in Netflix’s history, will apply to all new Netflix subscribers in the U.S. In addition, the company for the first time is hiking its Basic plan, which offers a single non-HD stream, from $7.99 to $8.99 per month (+12.5%). The Premium plan, which provides up to four Ultra HD streams, is increasing from $13.99 to $15.99 per month (up 14.3%). Netflix’s most popular plan, the Standard tier that offers two HD streams, is increasing 18%, from $10.99 to $12.99 per month. Netflix is flexing its pricing-power muscle to kick off 2019 - hiking fees for all streaming-video plans for customers in the U.S.
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