Netflix Price Hike Could Cost Company Almost 500,000 Users Netflix's recent price hikes could cost the company almost 500,000 subscribers, according to one analyst. The streaming giant raised rates on new customers in May of 2014, but grandfathered all existing customers at that time for a period of two years. Now those existing customers are paying more, with pricing for the two-stream, HD streaming plan jumping from $8 to $10 a month on May 1. The hikes should impact some 17 million people, or 37% of Netflix’s US subscribers.

While the bump will net Netflix some $520 million in additional annual revenue each year, Nomura Securities analyst Anthony DiClemente states the hikes could cost Netflix around 480,000 annoyed subscribers. “We note that this has long been a tenet of our investment thesis on the domestic business, as slowing subscriber trends are more than offset by increased monetization,” DiClemente wrote in a research note Monday. In other words, just like ye olde cable company, Netflix will look to price hikes as subscriber additions grow in order to keep pleasing investors. It's worth noting that not all grandfathered Netflix customers saw the hike on May 1. Netflix CEO Reed Hastings recently stated the company is still slowly deploying the hikes, with some of Netflix's oldest customers seeing the hikes the latest. We will phase out this grandfathering gradually over the remainder of 2016, with our longest�-tenured members getting the longest benefit,” Netflix CEO Reed Hastings wrote in a letter to shareholders back in April. “We are rolling this out slowly over the year, rather than mostly in May, so we can learn as we go.” And while Netflix might lose 480,000 subscribers due to the hikes, they're also set to add around 500,000 new subscribers this quarter, blunting the impact. Most Netflix customers still find the service to be a significant value, especially when compared to cable. Though as the Netflix catalog shrinks (one analysis suggests Netflix's catalog shrunk by 36% in the last two years) and the monthly cost nudges upward, that dynamic will start to change. Netflix ended the first quarter with 81.5 million streaming subscribers globally, 47 million of which are in the United States. Netflix ended the first quarter with 81.5 million streaming subscribers globally, 47 million of which are in the United States.







News Jump California Defends Its Net Neutrality Law; AT&T's Traffic Up 20% Despite Data Traffic Actually Being Down; + more news Are The Comcast-Charter X1 Talks Dead In The Water?; AT&T May Offer Phone Plans With Ads For Discounts; + more news Europe's Top Court: Net Neutrality Rules Bar Zero Rating; ViacomCBS To Rebrand CBS All Access As Paramount+; + more news Verizon To Buy Reseller TracFone For $7B; 5G Not The Competitive Threat To Cable Many Thought It Would Be; + more news MS.Wants Records From AT&T On $300M Project; Google Fiber Outages In Austin, Houston, Other Texan Cities; + more news States With The Biggest Decreases In Speed; AT&T Hopes You'll Forget Its Fight Against Accurate Maps; + more news AT&T's CEO Has A Familiar $olution To US Broadband Woes; EarthLink Files Suit Against Charter; + more news 5G Doesn't Live Up To Hype, AT&T's 5G Slower Than Its 4G; Cord-Cutting Now In 37% of Broadband Households; + more news FCC Cited False Broadband Data Despite Warnings; ZTE, Huawei Replacement Cost Is $1.87B, But Only $1B Allocated; + more Cogeco Rejects Altice USA's Atlantic Broadband Bid; AT&T Is Astroturfing The FCC In Support Of Trump Attack; + more news ---------------------- this week last week most discussed

Most recommended from 59 comments

tired_runner

Premium Member

join:2000-08-25

New York 19 recommendations tired_runner Premium Member Got the email today Two HD streams now costs $9.99, up from $7.99.



Still not bad navyson

join:2011-07-15

Upper Marlboro, MD 2 edits 10 recommendations navyson Member Netflix content has dropped 40% in the past few years



Here is the article



Exstreamist pulled numbers from uNoGS (unofficial Netflix online Global Search) and discovered that in the United States, Netflix only has a little more than 5,000 movies and TV shows available to its users. However, in early 2013, the service offered nearly 9,000 movies and shows, signaling a 40 percent drop in content - See more at: »



»www.techtimes.com/articl ··· -now.htm I was reading a report that stated that the content available on Netflix is 40% less now than it was from a few years now. Higher cost and 40% less content? Not good.Here is the articleExstreamist pulled numbers from uNoGS (unofficial Netflix online Global Search) and discovered that in the United States, Netflix only has a little more than 5,000 movies and TV shows available to its users. However, in early 2013, the service offered nearly 9,000 movies and shows, signaling a 40 percent drop in content - See more at: » www.techtimes.com/articl ··· JTH.dpuf

shimonmor

Premium Member

join:2000-12-30

Sedro Woolley, WA 4 recommendations shimonmor Premium Member Catalog slimming bigger issue for me I could live with the small price hike but the shrinking catalog and padding with junk will probably end my relationship with Netflix. Much of the catalog is duplicated by Amazon Prime, anyway. And Netflix concentrating on making their own shows doesn't appeal to me because the vast majority of their home-grown content is not entertaining. And to make matters worse...their DVD mail catalog is also shrinking...hard to find movies are no longer available which was one reason I dropped their DVD mail option. mikesco8

join:2006-02-17

Southwick, MA 4 recommendations mikesco8 Member The Math works in Netflix's favor... If they lose 480,000 customers that translates to about $58 million a year in lost revenue. If Netflix is gaining $512 million a year from the price increase, it is a no brainer for them.