Netflix’s (NASDAQ:NFLX) latest price increases will start to kick in for current subscribers on Thursday, boosting monthly fees for U.S. subscribers for the first time since 2015.
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Under the new pricing tiers, the streaming giant’s most popular service plan, which provides users with two high-definition streams of Netflix’s content, costs $10.99 per month, up $1 from its previous level. Subscribers for Netflix’s premium, four-stream plan, which also includes 4K video, is set to jump to $13.99, a $2 increase. The changes will kick in at least 30 days after customers are notified, according to Netflix.
Netflix CEO Reed Hastings defended the price hikes earlier this month during a call with analysts, stating the increases were meant to match the company’s recent additions to its original content offerings. The company still offers a $7.99 option for users that provides a single, standard-definition stream.
“Price is all relative to value,” Hastings said. “We’re continuing to increase the content offering and we’re seeing that reflected in viewing around the world.”
Fueled by the success of original series like “House of Cards” and “Stranger Things,” Netflix is set to pour more resources into its original content wing in upcoming months. Executives said spending on its programming could approach $8 billion in 2018. Netflix touts about 109 million subscribers globally.
While customers may not be thrilled with Netflix’s price hikes, the company’s stock soared earlier this month on the news. Netflix shares hovered at about $195 as of market close Wednesday after peaking at a record high of roughly $202 per share earlier this week.
“We believe that Netflix’s pricing power has increased materially over the past few years as their content slate and technology has improved,” RBC Capital Markets analyst Mark Mahaney wrote earlier this month in a research note, according to Variety, adding that the price increases would likely translate to long-term revenue growth.