Shares of Netflix (NFLX) are up more than 3% after the streaming video provider raised the price of its basic monthly service by $1.
The Los Gatos, Calif.-based company’s stock rose 3.3% to $111.67 after the news broke.
The $8.99 monthly plan that lets subscribers have two concurrent high-definition video streams will now cost $9.99 monthly. The other monthly plans, a $11.99 four-screen HD video plan and a $7.99 one-screen standard definition plan, remain the same.
The new $9.99 pricing is for new customers; current subscribers will continue paying $8.99 for the next year before the increase kicks in.
“To continue adding more TV shows and movies including many Netflix original titles, we are modestly raising the price for some new members in the U.S., Canada and Latin America,” the Los Gatos, Calif.-based company said in a statement. “As a thank you to existing Netflix members — who aren’t already benefiting from grandfathering — we will maintain their current price for a year.”
Netflix raised the subscription price in Europe by 1 Euro. With more than 69 million global subscribers, the price increase could increase the streaming leader’s revenue by more than $800 million annually.
That funding is needed to allow the company to continue its aggressive original programming plans and acquisition of other films and TV content for subscribers. Netflix expects to spend $5 billion on original and acquired content next year, and research firm Ampere Analysis expects that to grow to $6 billion by 2018.
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