Netflix’s stock has hit an all time high closing at $194.39 per share, up 5.4% for the day. This gives the streaming giant a current market capitalization of $83.9 billion. The big jump came shortly after the company confirmed it was raising the prices to its subscription service. The two-stream HD tier price is increasing to $10.99 per month, up $1 from the previous $9.99 monthly fee. Its four-stream Ultra HD plan will move from $11.99 to $13.99 per month. The price increase comes as the company spends more money on original and licensed content. Netflix will spend close to $7 billion next year, according to its content boss, Ted Sarandos.
However, despite cries from subscribers, the stock surge suggests investors are confident the increase won’t cause big subscriber losses, as Netflix has continued to improve the quality of its content offering over the last year. Currently, it is the home to some of the most popular original content on the market. Shows like “Stranger Things,” which won several Emmy awards this past month, and “House of Cards” have created a fairly loyal following.
The company’s most affordable plan will not change from its current price of $7.99 per month.
RBC analysts have estimated that Netflix’s price hike will boost its revenue by about $650 million in 2018.