Well, this was probably as inevitable as a mid-episode Frank Underwood monologue.
Netflix is nudging prices higher on two of its three membership tiers in the U.S., according to a new fee structure posted to the company’s website on Thursday. The cheapest plan, which allows streaming to only one device, will remain $7.99 a month. But the mid-tier plan will go up by a dollar to $10.99, and the premium subscription will go up by $2 to 13.99 starting in November.
With a rapidly growing subscriber base both domestically and abroad, Netflix is quickly gaining leverage over nearly the entire entertainment world. It’s increasingly competing with traditional Hollywood studios in bidding wars for hot projects and at red-carpet awards shows.
Now the company is squeezing U.S. consumers a little more as well, after holding off on price increases for the last two years. But Netflix’s new pricing structure is still much cheaper than most monthly cable bills, which average just over $100 a month in the U.S. And its roughly in line with comparable plans from streaming competitors Hulu and Amazon.
The prospect of a Netflix price hike was roundly celebrated Thursday on Wall Street, where Netflix has long been an investor favorite. Shares climbed 4 percent in mid-afternoon trading, on track for a record close above $192.
For the year, Netflix is up more than 50 percent.
Other notable details about the company:
– Netflix has spent lavishly on its growth strategy, including a big jump in debt. As of the second quarter, it reported $13.4 billion in total liabilities, versus $16.5 billion in assets.
– Netflix has said it anticipates spending over $6 billion this year on original shows.
– Netflix’s partnership with Marvel has generally been a bright spot for both sides, but hit a rare snag this week. The two sides agreed to cancel a promotional event in New York for an upcoming series featuring the Punisher due to concerns it would be inappropriate so soon after the real-life shooting rampage in Las Vegas.
– Variety estimates that Netflix recently paid about $25 million to lure star showrunner Shonda Rhimes away from ABC, where she’d produced hits including “Scandal” and “Grey’s Anatomy.” Rhimes praised the greater creative freedom at Netflix, but also had some pointed words about Hollywood’s compensation for creative talent in general, according to Variety’s account of her remarks at a recent conference.
“Disney has made $2 billion on ‘Grey’s Anatomy,’ ” she said of ABC’s parent. “I don’t have $2 billion.”