Netflix hikes price of its most popular service by a buck, to $9.99
After raising rates last year, the streaming-video service ups the price of its "standard" option in the US. But current members won't see a higher bill for a year.
Joan E. SolsmanFormer Senior Reporter
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Popular streaming-video service Netflix is raising prices for the second time in two years, lifting the cost of its most popular level of service in the US, Canada and Latin America.
The sign-up page on Netflix's site said that the company's "standard" tier of service, which lets two people watch separately at the same time and includes content at a high-definition picture quality, would increase by $1, to $9.99 a month, starting November 18. Prices for its "basic" and "premium" tiers remain the same.
Existing members get a slight reprieve and will keep their current price for a year, the company said.
"To continue adding more TV shows and movies, including many Netflix original titles, we are modestly raising the price for some new members in the US, Canada and Latin America," Netflix spokeswoman Anne Marie Squeo said. She added the company is releasing nearly 450 hours of original and first-run content globally this year. (First-run means Netflix is the initial place you can watch something in a particular territory.)
Netflix has grown to 65 million subscribers thanks to its combination of international expansion and high-profile original content, such as the series "House of Cards" and "Orange Is the New Black." But those efforts come with big price tags, prompting the company to raise prices once last year in addition to the most recent hike. Thursday's understated announcement -- through a change to its website and an email to current members -- is similar to the last hike and starkly contrasts its price increases in 2011, when a 60 percent bump outraged US members and triggered a wave of defections.
The company raised prices by a euro in European markets this summer. The latest increase raises the price of the standard plan to $9.99 in the US, Canada and Latin American countries where the company prices its service in US dollars. Chile, Colombia and Mexico also are raising prices -- for all three plans -- in their local currencies.
Some people who were members before 2014's price increase were "grandfathered" through that hike with a guarantee to keep their price for two years; their prices will be unchanged until at least May 2016.
In 2011, Netflix said it would divorce its DVD-by-mail service from its streaming one. The DVD spinoff would be called Qwikster, and rather than a combined $9.99 bill for both, customers would pay $7.99 for each. The move enraged customers, and a chastened Netflix company ultimately aborted the spinoff idea, but not without losing 77 percent of its stock's value in four months and 800,000 subscribers.
Netflix shares were up 5.4 percent, or $5.79, at $113.89 in recent trading.
Update, 12:45 p.m. PT: Adds details of Latin American and Canada pricing.