netflix money

Netflix has spent the last several years continually producing brand new content, and while all of those new shows are great for subscribers, they also have had an unintended effect on our wallets. Netflix has already started increasing prices, and has stated that more price increases will most certainly be coming in the future. However, while most Netflix users understand that some prices increases do happen over time, a new study found there is a dollar amount that would induce a lot of users to quit the service. And the number may not be quite as high as you would guess.

In fact, it's only a few dollars higher than current subscription rates. According to a new study from Digitalsmiths (via the Wrap), the highest percentage of people that were polled said they would be willing for prices to increase to between $12 and $15 before they would consider quitting the service. This is good news for Netflix, as 39% of the people polled said they would be willing to stick around until at least the time when prices increased to $15. The bad news? A whopping 29% of households said they were already fed up with the price increases and plan to quit Netflix the next time the numbers go up again.

Although the report doesn't outright state it, we're assuming this is looking at households with the most popular Netflix plan, the Standard Plan, which currently costs consumers $9.99 per month and comes with HD viewing and the ability to watch Netflix on more than one device at one time. It's also the plan that has been most affected by the price hikes. There are higher tier and lower tier price plans that still bring in revenue, with the higher tier plan already costing subscribers $11.99--around the sum that most users say they would quit the service at.

The report is a bit worrying, as Netflix has already seen stagnating subscriber growth--especially in the United States. Recent earnings information reveals that fewer people are signing up for Netflix each quarter, which indicates the market is already saturated. This also means that some investors are already quietly selling off stock. Numbers still seem to be growing pretty well worldwide, and the majority of Netflix users are expected to be based somewhere other than the United States by 2018. However, there are other challenges related to trying to push into various countries around the world.

We'll have to wait and see whether or not Netflix sees a lot of loss in terms of viewership in the US as the service gets more expensive. For example, while many people might claim they won't pay more than $15 bucks for the service, in reality, if prices go up to $16 or $17 bucks, they might still stick around. People will begrudgingly pay more for something even if they don't think its fair pricing if they use the service enough. Besides, Netflix is a staple for a lot of cord cutters, and still comes in way cheaper than the cheapest of cable packages--and that would stay true even if the price increased to 20 bucks.

You can see which programs Netflix plans to premiere over the next several months here.

Comments

Related

Hot Topics

Hot Shows

Gateway Blend ©copyright 2017