In a move that disgruntled some customers but delighted many shareholders, Netflix raised the prices for its U.S. streaming subscribers this week. For the first time in its history, the company raised the prices for all three streaming plans, including the highest ever increase for the most popular standard plan, allowing HD streaming on up to two devices simultaneously.
Having last increased its prices in the fall of 2017, Netflix felt it was due another price hike to “continue investing in great entertainment and improving the overall Netflix experience”. In order to defend its position as the world’s most popular streaming platform, the company has been investing heavily in original and licensed content. In the first nine months of 2018 alone, Netflix spent $8.5 billion in cash on streaming content, an investment that will pay off in the long run as long as the company continues to grow its international subscriber base.
As the following chart shows, this week’s change marks the fourth price hike to Netflix’s standard plan in nine years. And despite it being the largest one (+18%), the subscription price still looks like a bargain compared to the average price of a premium cable subscription, which sits around $100.