Netflix Is Getting A Price Hike, Investors Love It And Customer Protest Is Unlikely

The subscription-based movie streaming giant Netflix has just announced an increase in the prices of its monthly subscription fees. The price hikes are due to start on Thursday for US customers and Wall Street is already loving the news. The company’s stocks are up by four percent, which simply makes investors ecstatic, but customers might not be as thrilled.

The price hike is expected to increase the movie streaming company’s revenue by $650 million in 2018, Business Insider reports. The lowest tier plan won’t be affected. However, the “standard plan” will get a $1 increase from $9.99 a month to $10.99, while the most expensive plan that comes with 4K streaming will be $13.99 from $11.99.

As to why Wall Street is going nuts over this news, The Motley Fool provides three reasons for investor excitement. Apparently, this new price hike does not really make anyone nervous that subscriber numbers will go down as a result. Netflix has been increasing its subscription fee costs for years and every time it did so, its viewers only grew in number.

There’s also the matter of its impeccable timing, with the company waiting after Q3 to implement the hike. The price increase might even make those betting against Netflix feel rather foolish.

The company has also enacted similar price increases in Australia and Canada this year, so it’s not really a surprise that it would do so for the US market. At a high rate of $13.99, the streaming service’s price range is also nowhere near as expensive as what others charge. HBO Now charging customers $15 a month is a good example.

Basically, what investors and Netflix executive already know is that people are going to want to watch more of the company’s content. An increase in price is not going to change that.