Variety has a story about a new Nomura Securities report suggesting that "hundreds of thousands of Netflix subscribers may bail on the streaming service after the No. 1 subscription video service raises prices for long-term customers over the course this year."
The story goes on: "About 27 million of Netflix’s U.S. streaming subs have either been subject to the price increase to $9.99 per month for the most popular two-stream HD plan, or will see it later this year, according to Nomura Securities analyst Anthony DiClemente. The price hikes could result in 480,000 customers cancelling their service, he estimated — while at the same time leading to about $520 million in additional annual revenue for Netflix."
Variety notes that "in the U.S., Netflix in May began raising the price of the standard HD service for those previously paying $7.99 monthly by $2, to $9.99 per month. Customers who signed up for the HD plan at $8.99 following the May 2014 price increase will be rolled over to $9.99 in October. Alternatively, the affected customers will have the option of continuing at $7.99 for a single-stream, standard-definition plan."
Netflix has conceded that the price increases are likely to create a higher churn rate than it is used to, but that it will be able to better monetize the subscribers who remain with the service.
The story goes on: "About 27 million of Netflix’s U.S. streaming subs have either been subject to the price increase to $9.99 per month for the most popular two-stream HD plan, or will see it later this year, according to Nomura Securities analyst Anthony DiClemente. The price hikes could result in 480,000 customers cancelling their service, he estimated — while at the same time leading to about $520 million in additional annual revenue for Netflix."
Variety notes that "in the U.S., Netflix in May began raising the price of the standard HD service for those previously paying $7.99 monthly by $2, to $9.99 per month. Customers who signed up for the HD plan at $8.99 following the May 2014 price increase will be rolled over to $9.99 in October. Alternatively, the affected customers will have the option of continuing at $7.99 for a single-stream, standard-definition plan."
Netflix has conceded that the price increases are likely to create a higher churn rate than it is used to, but that it will be able to better monetize the subscribers who remain with the service.
- KC's View:
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Funny enough, I got my email yesterday from Netflix informing me that my monthly subscription price will go up on July 20. I'm a movie guy, plus I really like a lot of the Netflix proprietary content ... so I never even considered the possibility of cancelling Netflix. Hell, $9.99 a month seems like a bargain.
