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Netflix Raises Prices in the United States and Canada; Stock Perks Up

Netflix Raises Prices in the United States and Canada; Stock Perks Up

The United States and Canada are increasing its premiums, with the most popular subscription tier going from $13.99 a month to $15.49 in the United States.

The lowest level of service climbed $1 to $9.99, and the premium tier is now $19.99, up from $17.99.

The basic plan price in Canada was not changing, but the standard plan (aka the middle tier) increased to $16.49 Canadian from $14.99.

Netflix's stock market jumped immediately on the news, reaching as high as $538 before calming down to close at $525.69, up 1%. It has fallen thus far in 2022, along with most other Nasdaq stocks.

The price increases are the first in North America since October 2020 and will be implemented for all new subscribers in the coming weeks.

Netflix remains the leader in with 214 million global subscribers, and its scale gives it considerable leverage in terms of price. Even though growth there has dropped of late and the base of 74 million customers is just one-third of the total total, the overall effect is more revenue.

Netflix's stock market is now positive and doesn't need to borrow to fund its operations, but it relies on increased prices to bankroll its massive spending on programming. In 2021, Co-CEOs Reed Hastings and Ted Sarandos have strongly indicated that they are continuing their strategy of stair-step increases in spending.

Red Notice and Don't Look Up have continued to establish new standards lately, bringing them to the top of the movie charts, and Squid Game has become a phenomenon.

Netflix's management will address pricing and other strategic issues next Thursday when the company makes its fourth-quarter financial reports.

In a statement to Deadline, a spokesperson said, "We understand people have more entertainment choices than ever and we're committed to delivering an even better experience for our members." "Were updating our pricing so that we can continue to offer a wide variety of quality entertainment options. As always we offer a range of options so members can choose a price that works for their budget."

The streaming world has continued to become crowded, with Disney, WarnerMedia, Apple, and NBCUniversal all throwing their hats in the ring over the past two-plus years.

Peacock, NBCU's Peacock, has a free tier supported by advertising and a Premium version that costs $5 for most subscribers.

As streaming continues to evolve, price rises will be a real thing of life. Disney+ started at $7 a month, but its fast start after launching in November 2019 prompted the company to announce a $1-a-month increase in December 2020. Other players have switched the other way in search of scale HBO Max introduced a cheaper, ad-supported tier priced at $10 a month

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