Netflix Raises Prices for U.S. Subscribers in Bid to Keep Streaming Edge

SAN FRANCISCO — Netflix said it would raise prices 13 to 18 percent for subscribers in the United States, the company biggest increase since it began its video-streaming service 12 years ago.

The most popular Netflix plan, which offers high-definition streaming on up to two different internet-connected devices simultaneously, will get the largest increase, to $13 a month from $11. Even at the higher price, the plan is several dollars cheaper than HBO, whose streaming service costs $15 a month.

The additional cash generated by the higher subscription rates will help to pay for Netflix’s huge investment in original shows and movies and finance the heavy debt it has taken on in an effort to ward off rivals like Amazon, AT&T and Disney.

This is the fourth time that Netflix has raised prices for customers in the United States. The last increase was in late 2017. But it is the first time that higher prices will hit all 58 million of the company’s American subscribers.

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement.

Netflix has previously continued to offer a basic, $8-a-month streaming plan even as it raised rates on more comprehensive plans that came with better video quality and options for watching on different devices simultaneously.

This time, the price for the cheapest plan is rising to $9 a month. A premium plan offering ultrahigh definition video quality will jump to $16 a month from $14.

The new prices will apply to all new subscribers immediately and will then be rolled out to existing customers over the next three months. Customers in about 40 Latin America countries where Netflix bills in United States currency will also be affected, except for key markets like Mexico and Brazil.

Netflix had nearly 79 million subscribers outside the United States in September.

The higher prices could alienate some subscribers and possibly even touch off a wave of cancelations. Netflix faced a major backlash in 2011 when it unbundled video streaming from its older DVD-by-mail service, resulting in a 60 percent price increase for subscribers who wanted to keep both plans. Netflix lost 600,000 subscribers after that switch.

The company is betting now that it can gradually raise prices, thanks in part to the string of hits over the past five years that has included “House of Cards,” “Orange Is The New Black,” ‘'Stranger Things,” “The Crown” and, most recently, the films “Bird Box” and the Oscar contender “Roma.”

The price changes coincide with a growing number of streaming options for consumers.

Amazon offers a streaming service as part of its Prime shipping program for $13 a month, or $120 a year. Hulu sells an ad-free service for $12 per month. AT&T’s WarnerMedia unit plans a broader streaming service this year centered on HBO. Walt Disney is gearing up to launch a streaming channel this year.

Apple is also widely expected to join the video-streaming fray, and the competition for programming is enabling top directors, writers and actors to charge more for their services. That has intensified financial pressure on Netflix, which has not been bringing in enough money to pay for all of its programming and other business expenses.

The company burned through about $3 billion last year and expects to do so again this year. To offset the negative cash flow, Netflix has been borrowing heavily. The company, which is based in Los Gatos, Calif., had accumulated nearly $12 billion in debt before borrowing another $2 billion in an October bond offering.

Concerns about the stiffening competition and Netflix’s ability to sustain its current leadership in video streaming has caused its stock price to slide 21 percent from a peak of $423.21 last June. The shares stood at $332.94 heading into trading on Tuesday.

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