Netflix raises prices, stock leaps 5%

Technology

Netflix on Thursday raised the prices of its standard and premium plans to $13.99 and $17.99 per month, respectively. Prior to Thursday, those plans were priced at $12.99 and $15.00, respectively.

Current Netflix customers will see the updated prices on their bill over the next two months, Netflix told CNBC. Customers will get a warning 30 days prior to the change.

The entry-level basic plan remains at $7.99 per month, the same price that was introduced last year. It’s the first increase since Netflix boosted the cost of its service in January 2019. Prior to then, the basic, standard and premium plans were available for $8, $11 and $14, respectively.

On the company’s latest earnings call, chief operating officer Greg Peters hinted that a price increase might be coming. He said if Netflix continues to do a great job investing in original content to deliver more value for users, then Netflix feels like “there is that opportunity to occasionally go back and then ask for members, where we’ve delivered that extra value in those countries, to pay a little bit more.”

Netflix’s standard plan offers up to 1080p quality and allows people to watch on two screens at the same time. Its premium plan includes support for sharper 4K resolutions and HDR and up to 4 screens at the same time. The basic plan supports 480p, about the quality of a DVD.

Shares of Netflix were up more than 4% on the price change. Disney shares were also up more than 3% in late trading, building on gains earlier in the day.

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