Netflix shares rise as subscribers face an 18 per cent price hike

Netflix has said it will be raising the prices of its streaming services for US subscribers by as much as 18 per cent, as the tech giant seeks to cover the costs of ploughing heavy investment into its original content.

Prices for its most popular standard viewing plan, which allows users to stream content on two devices at the same time, will be raised to $12.99 per month from $10.99 per month. Meanwhile its basic plan will rise to $8.99, and its premium plan will rise to $15.99.

Netflix's shares were boosted by the news, opening more than six per cent higher in the US this afternoon. 

A spokesperson for Netflix confirmed on Twitter that its prices would remain the same for UK users, after the platform hiked up British subscription costs last year.

The move was the first price rise for the US since 2017.

"We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members," the company said in a statement.

Netflix has been eager to raise more cash for its lucrative original content operation, creating top-rated shows such as The Crown, Stranger Things and Black Mirror.

Fending off competition from the likes of Amazon's Prime Video service and Sky's Now TV, Netflix's long-term debt pile has almost doubled from $3.4bn (£2.8bn) in 2016 to $6.5bn in 2017. Analysts have predicted the company will have hit a debt level of $8.33bn by the end of 2018, according to Reuters.

The news comes ahead of Netflix's upcoming quarterly results, which are set to be published after the market closes on Thursday evening. 

Consensus estimates as collated by S&P Global Market Intelligence have forecasted Netflix's revenue for 2018 to have reached $15.8bn, with a net income of $1.8bn. Its share price rose almost 20 per cent across the last year.