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Netflix is increasing monthly fees for US subscribers

The new year is bringing a number of changes to the fore, specifically for those in the United States, as Netflix subscribers will be subjected to an increase.

The video streaming site, earlier this week released a statement explaining that the increase in monthly subscription fees by 13 percent for the basic plan and 18 percent for the top plan.

This is Netflix’s first increase since 2017. Prices for its popular standard plan, which allows streaming on two devices at the same time, will increase to $12.99 per month from $10.99 per month.

The video streaming site will increase its top plan, which allows streaming on four devices to $15.99 from $13.99 per month and the basic plan fee will increase to $8.99 from $7.99.

“With Netflix frequently tapping the debt markets on several recent occasions, the price hike could help ease concerns with a growing deficit on free cash flow to fund a likely continued escalation in Netflix’s content spending, which likely topped $13 billion in 2018,” said CFRA analyst, Tuna Amobi.

Netflix spends billions on its original content, which has award-winning shows such as The Crown, Stranger Things and Black Mirror. While these shows have proved wildly popular, creating this original content does quite a lot of money in order to produce.

“It highlights that Netflix has pricing power and even after the increase it remains a very cheap entertainment alternative, added Pivotal research group analyst, Jeff Wlodarczak.

For those residing in South Africa, however, there is no need to worry as Netflix subscription prices locally will remain the same, for now.

[Source – IOL News]

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