Netflix stock rose nearly 7% Tuesday, after the streaming video pioneer said it would raise monthly prices for service between 13% and 18% for all U.S., subscribers, which should help offset its costs for original programming.
Shares of Netflix soared as high as $357.22 (up 7.3%) on Jan. 15 after the announcement. The stock closed at $354.64 each, up 6.5%.
Netflix has raised prices four times, the latest being in late 2017. But this rate hike -- it will immediately affect all new subscribers and be rolled out across the U.S. over the next three months -- is its biggest yet and the first time an increase will affect its entire U.S. subscriber base. Netflix has about 58 million domestic customers.
It’s most popular plan will receive the biggest increase -- from $11 per month to $13 per month, or 18%, for HD streaming content on up to two devices simultaneously. The price for its basic service -- SD content streamed to a single device -- will rise 13% from $8 per month to $9 per month.
Netflix was expected to spend about $12 billion to $13 billion on original content in 2018. The company has racked up a huge debt to pay for content, and raising prices is expected by some to ease some Wall Street pressure on the company.