Netflix, one of the most popular streaming sites in the world, announced that they will be raising their prices by either 13 to 18 percent, depending on the plan.
This is Netflix’s biggest U.S. price increase since the company launched its streaming services in 2007. Although the percentages might sound a little scary, the reality is that Netflix’s plans will only increase by $1 to $3 in price.
New subscribers will immediately start with new plans. People on the basic plan will have prices increase from $8 to $9, standard will go from $11 to $13, and premium will go from $14 to $16.
The video streaming market has been fast-paced and highly competitive for the past few years. In order to keep current subscribers in check while winning over new subscribers, Netflix is constantly adding new content.
While this streaming service has been slowly raising their prices over the years by a dollar or two each time, their reasoning for the higher increase is justified by their wanting to add more substance to their platform. Last year, Netflix added more than 700 TV shows and movies to its database.
News of the rate hikes will probably make investors ecstatic, but what do actual subscribers think?
Streaming Observer and Mindnet Analytics partnered to conduct a survey with 607 random male and female U.S. subscribers. When asked about choosing to cancel the streaming service because of the price change, 24 percent said they might cancel, while 3 percent were going to cancel. Another 10 percent said they would probably downgrade to a cheaper plan.
No matter what the actual statistics turn out to be, the price hike will most likely turn out profitable for Netflix.
Most users have been adamant about not wanting advertisements in the past, but with this spike in price, many are turning to an option that is cheaper with the addition of ads. Still, Netflix’s loyal base of fans will not likely cease.
“Raising the price to sixteen dollars? To be honest, I just use my parents’ account. I don’t pay for it,” said Michael Weston, a student at Salt Lake Community College.
With the surge of new content Netflix has coming, is there a price point that would be too much? To some, if Netflix offers quality content, it will be worth it.
However, to others such as Darlie Leung, another student at SLCC, it may be a deal breaker. Leung says, “No, the maximum I would go is maybe twenty dollars. I also have Hulu for cheap with my student discount anyway.”
Netflix will have to continue investing in content to keep subscribers on their toes, but it looks like they are here to stay.