Netflix Raises Rates on Subscribers

Netflix Raises Rates on Subscribers
Danimasetoma [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons

Netflix has announced that it will raise the rates subscribers pay for the streaming service. The increase is the largest in history.

According to The Daily Caller:

Netflix announced its biggest subscriber price hike in company history Tuesday morning.

Netflix (NFLX), which is currently up 6.80 percent for the day as of 1:00 p.m. EST, announcedit would be increasing its monthly subscription price for all U.S. customers. This means its most popular watching option, which typically costs the customer $11, will go up to $13 per month. The price hike is estimated to be somewhere between 13 and 18 percent, considered the largest increase in the company’s nearly 13-year history.

Curiously, Netflix’s stock price surged at Tuesday’s opening bell, suggesting investors are not overly concerned about the price hike, and that it may indicate a healthy consumer loyalty and a promising indication of growth.

Netflix has been doing very little but rallying this year. After it took home five awards at the 2019 Golden Globes, its stock price surged over six percent and has been enjoying relatively stratospheric highs since. Its contemporaries in the FAANG group (Facebook, Amazon, Apple, Netflix, Google) have been enjoying similarly strong numbers despite a recent pre-Christmas selloff and tense trade talks with China.

The rate hike is supposed to help fund more original content while helping the company finance its debt.

 Source: American Update

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