Netflix fans, get ready to spend a little extra dough every month if you plan on keeping your subscription. The streaming giant announced it is hiking fees for all streaming plans in the United States, flexing its most popular plan to $13 a month.
The Standard tier, which offers two HD streams, is increasing 18 percent, from $10.99 to $12.99 per month.
The Premium plan, which provides up to four Ultra HD streams, is increasing from $13.99 to $15.99 per month.
Additionally, the company is also increasing its Basic plan, which offers a single non-HD stream, from $7.99 to $8.99 per month.
The new prices will apply to new Netflix subscribers immediately, while existing subscribers will be moved to the new pricing plans "over the next few months," the company says.
The price hike will extend to about 40 countries in Latin America (including Uruguay, Barbados and Belize) where it bills in U.S. dollars — but for now, it will not take place in Mexico and Brazil, the region's biggest markets.
"We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience," a company spokeswoman said in a statement.
The price increase is likely part of a plan to help offset growing content costs, which were projected to hit $13 billion on a gross basis in 2018. The company has also raised billions in new debt; the company reported $8.34 billion in long-term debt as of Sept. 30, up from $6.50 billion at the end of 2017. Its most recently projected negative cash flow of more than $3 billion for 2018 shows that the streaming service continues to burn through cash in an effort to produce original content in the face of looming competition from Hulu, Amazon Prime, HBO Go and Disney. Its negative free cash flow in 2017 was $2 billion.
The last time the company raised prices was in the fourth quarter of 2017 and saw minimal cancellations. Tuesday's news marks the fourth time Netflix has raised prices since launching.
Netflix CEO Reed Hastings has said in the past that incremental price hikes will be needed as the company invests more money in original series and licensing popular programming.
"Price is all relative to value," Hastings said in late 2017. "We're continuing to increase the content offering and we're seeing that reflected in viewing around the world."0comments
Reaction to the new price hike remains to be seen, although the news has sent the company's stock up more than 6 percent in early trading Tuesday, CNBC reports.
The company is scheduled to report Q4 2018 results on Thursday.