![]() These same numbers predicted that although an increase in price would result in a loss of subscribers, the increased revenue would more than offset the loss of subscriptions on the bottom line. The Streaming Observer website also ran a poll and those results indicated that 24% of Netflix users would consider canceling if there was an increase in the monthly rates. These percentages rose as the predicted monthly rate increases grew. Approximately 16% of users claim that if this price jump was implemented, they would cancel their plans (Snider). The Diffusion Group recently conducted a survey of adults to predict what percent of users were likely to cancel their subscriptions if the price of usage increased $1 per month. The increased revenue should allow Netflix to create better programming and combat the challenges from these respective competitors. Disney, Apple, and NBCUniversal have all announced that they will be getting into the streaming business which will provide added competition to Netflix. Many of their top shows offer new episodes each week which in turn, keep the viewer engaged. Netflix has a reputation of pumping out shows at a frequent rate, and they feel the more they invest into creating new shows, the easier it will be to justify the price increases. Over $8 billion were used to help create the shows that Netflix put out in 2018 (Pallotta). It is important to note that they still cost less than HBO Now’s $14.99 monthly charge.Ĭompetition and increasing production costs were the reasons driving the price increase. ![]() When asked about the increase, media analyst Rich Greenfield stated that as long as Netflix continues to provide content that interests viewers, the price increase will not affect subscriptions. Previously, they had increased rates of specific plans one at a time. ![]() ![]() There have been three price hikes prior to this increase, but this is the first time that the company will be increasing the rates for all its plans simultaneously. This would make it the largest price hike since the company’s inception in 2007 (Seigal). On January 15, 2019, Netflix announced that it would be increasing monthly subscription costs of its three plans by as much as 18%. ![]()
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