Netflix Stock Jumps to Record High after Price Raise for U.S. Subscription

Published Date : Oct 06, 2017

Netflix has been celebrating about an all-time high achievement of its shares since Thursday. This has come right after the company decided to hike up its prices for subscribers in the U.S. The company had been up a 5.4% Thursday to close its stock at a US$194.39 per share. This figure has been studied to be an all-time high by an entertainment news source.

Netflix has increased the price of its standard plan, one of its most popular services, from a US$9.99 to a US$10.99 per month. The highest tier-plan has been raised from a US$11.99 to a US$13.99 per month. It has been supporting four simultaneous and 4K video resolution streams. However, no change has been proposed for the lowest-tier plan, which is expected to stick to its existing price of a US$7.99 per month.

30 Days for Subscribers to Accept Price Hike, Change to Lower Plan, or Cancel Service

The surge in Netflix stocks has exhibited the confidence of investors in the company’s decision to increase its prices. Investors have been anticipated to hold the view that the price hike will not cause any major subscriber losses. The company has been predicted to boost its pricing power on the back of its continued efforts directed toward the improvement of content quality over the past year.

A market research firm has estimated that the price hike by Netflix could up its revenue earning by a nearly US$650.0 million next year. The price increase has been envisaged to ride on the constant focus of the company to spend more funds on content. According to Ted Sarandos, the company’s chief content officer, Netflix could spend an approximate US$7.0 billion in 2018.