Netflix will lift its prices on average by 8%, according to FBR & Co, to an average $10.16 per month for users when looking at all its streaming consumer packages.
The company’s stock closed at $194.42.
Starting in November, the price for Netflix’s premium plan -- four concurrent streams and ultra HD -- will increase $2 to $13.99 a month. Netflix’s standard plan -- two concurrent streams and HD -- will climb by $1 per month to $10.99. Its basic plan (1 stream, standard definition) will remain unchanged at $7.99 per month.
Barton Crockett, media analyst at FBR & Co., has some concerns about subscriber reactions. But overall, he says the news is “encouraging.”
“We don't think Netflix would be raising rates if it was uncomfortable with current [subscriber] trends, or with the competitive fallout of media conglomerates," he says, pointing to Disney's decision to pull content. He added that the streaming service is looking to "compete more directly in SVOD [subscription video-on-demand platforms].”
Crockett says the hike "seems to be a lower key announcement than former ones, so it might draw less consumer attention, which would be a good thing."
In 2011, there was major upheaval. Netflix announced it was raising prices by over 60% in some cases -- as well as separating its mail DVD business from its nascent streaming TV business. That caused it to lose some 800,000 customers, with its stock price dropping 60% in the third quarter of that year.