Netflix Inc (NASDAQ:NFLX) has announced the first increases in monthly fees in two years, hiking costs for two of its three main streaming subscription plans as it spends heavily on its own original content.
In an announcement after-hours in the US, Netflix said while its lowest-cost ‘Basic’ plan will remain at US$7.99 a month in the US and £5.99 in the UK, its most popular ‘Standard’ tier product - that includes high-definition video - will cost a dollar more at US$10.99, or 50p more in the UK to £7.99.
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Meanwhile, a ‘Premium’ subscription, which includes simultaneous viewing on four screens and ultra-HD 4k video will rise from US$11.99 to US$13.99 in the US, and from £7.99 to £8.99 in the UK.
The increases for both existing and new subscribers in two of its largest markets follow rises in Australia, Canada and Brazil earlier this year.
The world’s largest subscription video streaming service last announced a price increase in October 2015 for new customers in the US, with the rise kicking in for existing customers a year later.
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The higher pricing comes as the video streaming service spends heavily on original content and expanding outside the US.
Netflix had earlier said it would spend over US$6bn this year on original shows and expected to have negative free cash flow of US$2bn to US$2.5bn.