Netflix's most recent price hike occurred towards the end of 2017. The increase meant that subscribers to its HD plan went from one cent shy of ten dollars to one cent shy of eleven dollars. While that plan saw an increase of a dollar, Netflix's family plan saw a two-dollar increase. It has taken some time, but new data suggests that price hike has had a larger impact on subscribers than expected.
Data from the app Earnin suggests that Netflix has taken a hit among low-income subscribers, per Variety. This is an issue its streaming service rivals have not experienced. In contrast, YouTube and Hulu are adding new subscribers. Translation: Following the late 2017 pay hike, Netflix has seen a downturn in lower-income subscribers, while YouTube and Hulu have seen an uptick. And, the loss is significant enough to notice.
Netflix has raised its prices subtly over the years, in an effort to avoid substantial subscriber sticker shock. Whether the recent price hike is entirely behind lower-income subscribers' decision to turn away from Netflix in favor of its rivals is not clear. There are other issues that could be behind their decision to quit Netflix. The company that provided the data did not share the reason its users decided to abandon ship. The information collected only shows that subscribers did leave Netflix, and when they did it.
Therefore, evidence of the pay hike's impact could be correlative and not causative. With Netflix spending more money than ever on its content and with ambitions that seemingly intensify every day, one would think they do not want to lose any subscribers. Especially when money from said subscribers helps bolster the platform's ability to fund their projects. It is not a secret that the price tag for their ambitions does not come cheap.
Time will tell whether Netflix reacts to this data with any action regarding its prices. Word that the streaming giant was considering a new high price option tentatively titled "Ultra," spread a few months ago. But, despite the price hike at the end of 2017, Netflix still ranked high in customer satisfaction.
With Walmart considering a move into the streaming business with a price plan that would charge consumers less than $8 a month, the competition for consumer wallets is bound to heat up. Hopefully, that competition will lead to lower prices, so that people who want to stream can do so without it crushing them financially.
For new television content set to premiere on Netflix this year, check out our 2018 Netflix premiere rundown. Summer is winding down, but it is not over yet! Check out the new shows still set to arrive with CinemaBlend's summer premiere guide. For new television premiering this fall, check out CinemaBlend's guide to TV's fall premieres.