Netflix is raising its prices for the first time in a year on both standard and premium subscriptions. The standard service which allows for two screens to be watching at once is going up a dollar from $9.99 to $10.99 and the premium subscription is going up to $13.99 from $11.99. The basic service that allows one screen and does not have HD will stay at the same price of $7.99. Users start getting notified of the increased prices on October 19th and will have 30 days before the change takes effect. Netflix is doing this in hopes to get more exclusive TV shows and introduce new features to the product. This is after the company has spent billions on new streaming deals and original programming.
I think this a smart move from Netflix as people would likely pay a lot more for their Netflix subscriptions. Raising the prices by a dollar or two won't cause too many people to abandon their subscriptions and keeping the basic service the same price will make sure they don't lose some of their low income users. The market reacted well to the announcement as their stock price rose by 5.39% today which I think is a sign of good things to come.
http://money.cnn.com/2017/10/05/technology/business/netflix-price-increases/index.html
While I agree that a lot of people are willing to pay a little bit more for their Netflix subscriptions, they are not giving current members the option to keep their current rates (as so many other platforms have done). It makes me wonder if the number of expected subscription cancellations will be greater than originally anticipated.
ReplyDeletesmart move by Netflix. A couple extra bucks isn't a huge deal to most people, and I don't see many people cancelling subscriptions over it. Also Netflix subscriptions could go up if they do get more exclusive shows.
ReplyDeleteIt is very interesting to see the affect of the price increase to the company's stock price. I believed, before the share price went up, that Netflix users would actually disagree with this price increase and would negatively effect the share price. I guess investors believe that this price increase won't affect them much, and if anything, will actually boost their earnings. On one hand, I can see how this could benefit Netflix. Current users will just continue to pay their monthly fees, even if its increased slightly. And with their recent influx of quality content, I think they won't have a ton of trouble attracting new users, even at the higher price.
ReplyDeleteMost people will probably continue to use Netflix even if the prices do increase by a few dollars. I would personally prefer new and better options for TV shows and would be willing to pay extra.
ReplyDeleteI don't think increasing the price would have an affect on many people. It might be harmful to new customers as HBO Go, Amazon and HULU also provide similar service but at a lower price, but at the end of the day I don't think it would have much of an affect on Netflix.
ReplyDeleteI wish a had $100M to invest in Netflix right now. I think this subscription price increase is genius and will only improve the company's profitability. I know I'll be paying the extra without hesitation and i assume that is the majority consensus.
ReplyDeleteI agree that this small adjust in prices will not make a significant impact on number of consumers. While if they continue to make moves in this manner, towards a more expensive product, people will start to choose the readily available substitutes. I.e. Hulu, HBOgo, amazon prime video.. they are far from a monopoly.
ReplyDeleteI agree that this is a smart choice for Netflix. Even though increasing prices could affect the demand for subscriptions to decrease, it will mostly likely have little effect. The people who really enjoy Netflix will continue to have a subscription because it brings them happiness. Another thing that will help with demand is keeping the lower payment option for people who don’t think they can spend more of their disposable income on unnecessary things. This will keep these customers happy and they might recommend Netflix to friend or family member. This may help increase the demand for Netflix subscriptions or at least give Netflix a positive reputation. Also, to add more upgrade like new selections and HD they will have to increase the price to continue to gain a profit.
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