Netflix is raising its subscription prices

Netflix is raising prices in the United States as the streaming service invests heavily in new programs.

All three of the company's plans will increase in price by $1-$2. The standard $11 plan, for example, will increase to $13 per month.

The price hikes will be applied to all existing members over the next few months. New members will be charged the new price immediately. Its $8 plan will go up to $9 and it's $14 plan will go up to $16 a month.

Netflix (NFLX) stock spiked 6% at market open.

Netflix has been spending billions on new content — at least $8 billion last year, based on the company's own expectations from 2017. The streaming service also announced in October that it planned to take on $2 billion in new debt.

The new price hike could help keep investors happy, said Tuna Amobi, a media analyst at CFRA research.

With Netflix "frequently tapping the debt markets on several recent occasions, the price hike could help ease concerns with a growing deficit on free cash flow," he wrote in a research note Tuesday, adding that the company will likely continue to ramp up its spending on content. Netflix said last quarter that it was expecting negative free cash flow of $3 billion in 2018, and has similar expectations this year. Free cash flow measures how much cash is generated after the company covers investments in its business.Read more...