Netflix is set to hike prices in the U.S.
The streaming giant’s subscription plans will increase in price by $1-$2. While existing members will face the hike over the next few months, new subscribers will be charged with the higher prices immediately.
The price hike might be a result of Netflix’s content development ambitions. It possibly splurged $8 billion or more last year. The company projected a negative free cash flow of $3 billion in 2018, and has similar expectations for this year. Increase in subscription prices could potentially be a way to ease cash outflow pressures, especially as the company seems gung-ho on bulking up programming.
The company reported last quarter that it had more than 58 million subscribers in the US, and 137 million globally. Piper Jaffray's Michael Olson mentioned in a report last week that the streamer will add more subscribers in the U.S. than Wall Street analysts are expecting.
Netflix’s price hike and plans of beefing up content come at a time when competition looks to get hotter in the online streaming space. Disney’s streaming service Disney+ is getting launched this year. Comcast's NBCUniversal announced Monday about its plans to release a streaming platform in 2020. Also, there are speculations that Apple is apparently spending billions on making its own TV shows for distribution via the Apple TV, iPhone and iPad.