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Reasons Why Investors Love Netflix's New Price Hike

Reasons Why Investors Love Netflix's New Price Hike

A small price shift probably isn't enough to deter a majority of Netflix's 100 million subscribers, but as the streaming industry splinters into small niche services, customers have more options then ever.

Netflix's latest price increases will roll out to us subscribers over the next couple of months, and be fully in place in December. And the premium tier will cost $13.99 rather than $11.99. The basic plan will stay the same price of $7.99, just as it has since the plan was created in 2010.

In a statement to Mashable released on Thursday, the streaming giant said that the price increases were due to the flood of new TV shows and movies debuting on Netflix.

For now, analysts don't see terribly anxious, nor do investors, with Netflix's share price gaining 4.3% to $192.34 in recent market action.

It's the first time the company has raised prices in two years.

The standard service, which allows customers to stream shows and movies in HD on up to two screens at once, is now priced at $10.99 monthly, up from $9.99.

According to USA Today, the service's most popular plan will now cost $10.99 cents a month. Netflix will notify existing subscribers by October 19 when the price will go up and will give at least 30 days notice before the new bill will need to be paid.

Netflix had earlier said it would spend over $6 billion this year on original shows and expected to have negative free cash flow of $2 billion to $2.5 billion.

Netflix is cheaper than many of its competitors despite the current price hike.

It also referenced the new features that "improve the overall Netflix experience", which might indicate the fees Netflix is paying to content holders to allow offline playback.

Stranger Things avoiding a sophomore slump in it's much- anticipated second season wouldn't hurt either.