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| Photo credit: venturebeat.com |
The most popular binge watching service, Netflix saw a surge in share prices and it has decided to raise the prices for two of its subscription packages for the first time in two years.
Netflix's basic plan fee still remains the same at $7.99 per month, but the mid-ranged plan which lets you binge with two devices at the same time has been hiked from $9.99 to $10.99 per month.
The price for the top-tier plan, which you can use to stream on four devices in high definition has been raised to $13.99 per month from $11.99.
The company also recorded 4.5% increase in shares as it now sells at a record high of $192.80. According to Rob Sanderson, an analyst at MKM partners, "Most investors believe that Netflix is priced well below its value to consumers and want to see the management continue to increase monetization."
Another analyst for RBC Capital Market, Mark Mahaney wrote that “This price increase will likely be a revenue growth catalyst for the company. The content, not price, is the leading churn/churn-back factor amongst Netflix subs.”
Even with the price hike by Netflix, compared to HBO and Hulu, it is still considered cheaper because HBO currently charges $14.99 a month for streaming its shows like "Game of Thrones" and "Veep" while Hulu is said to charge $11.99 a month without adds.
While this will only affect Netflix's United States subscribers, it is necessary for Netflix subscribers in Nigeria and other countries to also to be prepared for this and not be caught off guard because investors opinions really matters and more revenue generation for the company means more money for investors and shareholders alike.
Increament in charges will begin to take effect from mid November.
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