Netflix is raising its prices starting this month

Netflix will be raising prices for its US subscribers starting on October 5, the company confirmed to Business Insider on Thursday.

The price of the lowest-tier plan will not change from $7.99. But the most popular, "standard plan," which allows HD and two simultaneous streams, will go up from $9.99 to $10.99 per month.

STOCK PRICE FOR NFLX

Full price information

The highest-tier plan, which supports features like 4K video resolution and four simultaneous streams, will increase from $11.99 to $13.99.

New subscribers will see the price increase go into effect on October 5, and current subscribers will start being notified on October 19, and have it take effect in their next billing cycle.

Netflix's price increases always spark drama.

In October 2015, Netflix raised its prices for new members, and then embarked on a process of "un-grandfathering" existing customers into new prices. When the bulk of that process happened last year, media and public chatter rose to such a degree that Netflix blamed it for a missed quarter of subscriber growth.

"People don't like price increases, we know that," CEO Reed Hastings said on an earnings call last year.

People may not like them, but price increases will likely continue to be necessary as Netflix spends more and more on content — close to $7 billion next year, according to its content boss Ted Sarandos. Funding its own original productions is not cheap, and Netflix has made big moves recently, like poaching TV power player Shonda Rhimes from ABC, and buying comic-book publisher Millarworld.

Still, despite the price increase, Netflix will remain a much better deal than cable, in terms of viewing time.

In a report this summer, UBS analysts found that an average pay-TV package costs over three times as much, per hour of viewing, as Netflix. The cost of traditional packages per-hour was around $0.42, while the cost of Netflix was about $0.10.

That lead is not going to be hurt too much by a $1 or $2 price increase.

RELATED: History of Netflix

5 PHOTOS
History of Netflix
See Gallery
History of Netflix
400303 03: Ready-to-be-shipped DVDs roll down an assembly line January 29, 2002 in San Jose, CA. The online DVD rental site Netflix.com has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)
400303 01: Netflix.com Chief Executive Officer Reed Hastings holds a ready-to-be-shipped DVD January 29, 2002 in San Jose, CA. The online DVD rental site has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)
400303 05: Packages of DVDs await shipment at the Netflix.com headquarters January 29, 2002 in San Jose, CA. The online DVD rental site has 500,000 subscribers who can rent, receive and return unlimited discs per month by mail. (Photo By Justin Sullivan/Getty Images)
Netflix CEO Reed Hastings gives a keynote address, January 6, 2016 at the CES 2016 Consumer Electronics Show in Las Vegas, Nevada. AFP PHOTO / ROBYN BECK / AFP / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

NOW WATCH: Google Pixel 2 vs iPhone X: The biggest differences between the two

See Also:

SEE ALSO: RANKED: Netflix's 5 original animated series for adults, from worst to best

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.