Netflix raised monthly prices for its streaming service in the U.S., sending the stock up as much as over 3% during trading on Friday.
Netflix stock ultimately rose 1.25% to close at $525.69 on Friday.
The monthly cost for the basic plan rose $1 to $9.99, the standard plan jumped from $13.99 to $15.49, and the premium plan rose from $17.99 to $19.99, according to Netflix’s website. Canadian prices increased as well.
A Netflix spokesperson confirmed the change. “We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options,” the spokesperson said in a statement.
Netflix has been raising prices in previous years and it is part of the company’s long-term strategy. Netflix previously raised prices for U.S. customers in 2019 and 2020.
Wall Street has been counting on Netflix to increase prices as customer growth wanes. Netflix’s price increases also reflect confidence from the company that its plans are entrenched in its customers’ lives and that they will not cancel or churn because of price increases.
Netflix said on Friday that customers will receive an email about the price increases 30 days before they see the increase.
Netflix is facing more competition than ever, especially from newer streamers including Disney+, HBO Max, Amazon’s Prime Video, and Apple TV+. Netflix said last fall it had over 213 million subscribers around the world, which is much higher than the subscription count of its new rivals. As a result, Netflix has been investing heavily in producing content for its service and said it expected to spend $17 billion on content in 2021.
Netflix reports quarterly earnings next week.