Netflix is Raising Rates

Netflix

Netflix

NetflixNetflix will be raising prices for its U.S. subscribers starting on October 5, the company confirmed to Business Insider on Thursday. The basic plan, which only lets users watch on one screen at a time and doesn't offer HD, will remain the same price at $7.99.

Wall Street appeared to approve of the move, as Netflix shares were up almost 4% to $191 apiece in midday trading. The change to its price will now have subscribers paying $13.99 per month.

Subscribers to the single, non-HD plan will not see a price increase.

The price increase should come as no major surprise since Netflix continues to produce some of the most popular series out there, Stranger Things, Orange Is The New Black and House of Cards being the most well-known shows to come from the platform. This is the logic that prevents some consumers from ditching cable: At a certain point, the cost of an internet plan plus various streaming services equals the price of the traditional TV bundle, or at least is competitive enough that it's mostly a wash. Those who try to sign up today for Netflix will see the new, higher prices and not the old pricing.

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HBO is a more expensive competitor at $14.99 a month.

Speaking to Gizmodo, a Netflix spokesperson cited more original and interactive content as reasons for the shift.

The higher pricing comes as the video streaming service spends heavily on original content and expanding outside the U.S. With more than 50 million subscribers in the US and 100 million customers worldwide, Netflix is already beating USA cable subscription totals (48 million). This package was previously only $11.99 per month. Netflix has also benefited from a low cost and widespread support across televisions, set-top boxes, video game consoles, and other hardware, making it cheap and easy for users to access its content.

Netflix's price increases always spark drama.

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