Prices are going up for 17 million existing Netflix subscribers next month. For some time, Netflix was allowing grandfathered users to continue paying $8 for the two-stream HD plan. The online streaming platform gave these users notice a few months back that they would have to pay $10 a month.
“In Q2 and Q3, we’ll be releasing a substantial number of our US members from price grandfathering on the HD plan and they will have the option of continuing at $7.99 but now on the SD plan, or continuing on HD at $9.99 a month,” wrote Netflix in a letter to shareholders earlier this year. “Given these members have been with us at least 2 years, we expect only slightly elevated churn.”
Business Insider cites that analysts at UBS have found that this upcoming change will impact 37 percent of Netflix’s US subscribers, or roughly 17 million users. Despite making headlines, a JP Morgan survey found that most users — 80 percent of those surveyed, to be exact — slated to be affected by the change had no clue about it.
The UBS analysts found that 3 to 4 percent of affected subscribers will cancel their subscription. If you’re one of the lucky ones that have been paying $8 a month for Netflix, then know that Netflix is still the fiscally savvy choice when compared to television in terms of “price per hour of entertainment.” USB found that Netflix costs users $0.09 per viewing hour while traditional TV packages cost $0.30 an hour.
“For those less familiar with how consumers typically respond to survey questions regarding subscription service price increases, it is uncommon for consumers to admit they are willing to pay more for most services,” wrote the UBS analysts. “41% of respondents in our survey were not willing to accept any price increase for Netflix, which is actually very positive when compared to 68% for pay TV. Consider pay TV costs have been rising 3-5% annually and the industry is now losing only ~1% of customers each year, relative to 68% of pay TV customers in our survey indicating no tolerance for price increases.”
