Netflix Price Increase
FYI Netflix will raise prices on about 17 million of its standard accounts next month.
Apparently no one else knew either.
In May 2014, Netflix began to raise the price of its standard streaming plan for new subscribers, first to $8.99 a month, then to $9.99 a month last October. Existing subscribers, however, were grandfathered in at $7.99 a month for the two-stream, “HD” quality plan.
But those days will soon be over.
According to Yahoo, next month, these grandfathered customers will be moved up to $9.99 for the standard plan. Analysts at UBS have estimated that this change will affect about 37% of US subscribers, or 17 million people.
And most of those 17 million subscribers aren’t aware of the coming changes. In a recent JP Morgan survey, about 80% of those who will be “un-grandfathered” in May didn’t know the price hike was coming.
How will these subscribers react?
UBS estimates that roughly 3% to 4% of affected subscribers will cancel, though many more say they will (about 15% of those surveyed by JPMorgan).
Despite the price increase, Netflix still has a lead in “price per hour of entertainment” over pay TV. Netflix costs $0.09 per hour of viewing, while a typical pay-TV package costs $0.30 an hour, according to UBS.
Here is Netflix’s current pricing structure: