*By Michelle Castillo* As NBCUniversal, Disney, and WarnerMedia prepare to launch streaming services, Netflix is raising subscription prices to ensure it has the budget to tighten its stronghold and expand its reach in the content wars. Netflix announced on Tuesday it will raise its prices 13 to 18 percent, just as NBCUniversal confirmed it was entering the streaming business with its own subscription service. The forthcoming NBC ad-supported service will feature some of its popular movies and TV shows. CNBC reported that sources said the service will be free to cable and satellite customers and available for a price of $12 for cord-cutters, pending deals with the cable companies. The company expects to earn about $5 per customer in advertising revenue, CNBC reported. As for Netflix's ($NFLX) customers, the cheapest monthly plan will rise from $8 to $9, while the standard HD plan will increase from $11 to $13. The 4K premium subscription will jump from $14 to $16. The changes would come immediately for new customers, and existing subscribers would get the price hike over the next three months. Netflix will use the subscription hikes to fund its original shows and movies. Netflix previously said it planned to spend $8 billion on content in 2018. While its original content budget is high, Netflix is fending off an increasing number of competitors. Though the company beat analyst expectations for domestic and international subscriber additions during its last earnings report, many analysts believe the streaming giant is close to maxing out in the U.S. market. Additionally, as more media companies like NBCUniversal, Disney ($DIS), and AT&T/Time Warner plan to debut streaming services in the next few years, customers may decide to move their eyeballs ー and more importantly, their subscription dollars ー away from Netflix. A Deloitte [study](https://www2.deloitte.com/insights/us/en/industry/technology/digital-media-trends-consumption-habits-survey.html) in 2018 found that 55 percent of American households subscribe to at least one streaming service, with the average person subscribing to at least three services. U.S. customers spend about $2.1 billion a month on these services, Deloitte estimated. U.S viewers already spend 38 hours a week watching video content, 15 hours of which is consumed via streaming services. Meanwhile, Disney [plans](https://www.cnbc.com/2019/01/14/nbc-to-launch-free-streaming-service-in-2020.html) to launch its service, Disney+, late this year. The streaming service will feature new and original series, including content from the beloved Marvel and "Star Wars" franchises. As a result, Disney will also pull its content from Netflix. Time Warner is also expected to launch its WarnerMedia streaming platform, which will offer three different packages at various price levels. It is also seeking original movies and TV shows for its service. It's not only traditional media providers Netflix has to fear. Apple ($APPL) has been in the market for original programming, locking up deals with Oprah and Sesame Workshop, among others. Sources have indicated that Apple wants to offer free content on its devices to bolster sales, a tactic favored by Amazon. The e-commerce giant also heavily invests in original shows and movies to encourage Prime subscriptions. Hulu for its part has also been increasing its original programming budget. In addition to the luxury of smoother content deals under the protection of its owners ー Disney, Comcast, and AT&Tー Hulu offers both ad-supported and commercial-free subscription options to grow its revenue YouTube also offers a similar over-the-top, cable substitute, YouTube TV. It's also producing its own original content that is free of charge to watch. PlayStation Vue also offers a way to watch live TV and on-demand content without a cable or satellite subscription. And with more companies expected to enter the fray, and marketplace growing increasingly crowded, Netflix may find it needs to spend even more to sustain viewers' interest.

Share:
More In Business
‘Chainsaw Man’ anime film topples Springsteen biopic at the box office
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
Flights to LAX halted due to air traffic controller shortage
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing defense workers on strike in the Midwest turn down latest offer
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
FBI’s NBA probe puts sports betting businesses in the spotlight
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla’s profit fell in third quarter even as sales rose
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Load More