Netflix may be preparing to raise prices

“If you logged on to Netflix over the weekend [in Australia] you may have been shocked to see price increases for all subscriptions,” Rob Stott reports for BuzzFeed News.

“The streaming giant has been quietly testing out users’ reactions to higher subscription fees ahead of the introduction of the so-called “Netflix tax”, which will see the GST applied to overseas digital purchases, and will come into effect from July 1,” Stott reports. “The tested new fees shown to some viewers saw Netflix’s basic ­service increase from $8.99 a month to $9.99, its standard service increase from $11.99 to $13.99 a month, and its premium service from $14.99 to $17.99.”

“By Monday morning increased subscription prices shown to some customers had reverted back to normal,” Stott reports. “A spokesperson for Netflix said the service wants to be transparent about its testing, and users will be notified before any fee increases are fully implemented.”

Read more in the full article here.

“Wall Street has valued Netflix as having a good deal of pricing power,” Brian Sozzi writes for TheStreet. “The Street has seemingly forgotten the harsh reaction to Netflix raising prices back in 2011 and how the streaming giant had to backtrack. To keep Netflix shares hovering at insane levels, CEO Reed Hastings will have to push some form of serious price hikes through — and not five years from now.”

Also, “Netflix has to raise prices to support rising sums to develop content and lay the foundation for its streaming service across the world. Keep in mind Netflix continues to burn through an absurd amount of cash. At some point Wall Street will demand cash generation, consistent if possible,” Sozzi writes. “Start saving those pennies, Netflix users.”

Read more in the full article here.

MacDailyNews Take:

SEE ALSO:
Netflix spilts DVD-by-mail and streaming services; CEO Hastings: ‘I messed up’ – September 19, 2011
Price-raising Netflix is tone-deaf on public perception – July 26, 2011
Netflix increases prices, changes DVD and streaming plans – July 13, 2011

9 Comments

    1. I’m sorry, but I have to disagree. I find most of their originals to be yes, big budget, but also totally forgettable poop. If that is the justification, rather than new and desirable features to the service, forget it. We are rapidly approaching ending up right back where we were with cable. Some ‘revolution’ this has turned out to be. :/

    2. I have not been compelled to watch their OC. Not enough to keep me as a customer. I am a bit fed up with their streaming library. I might switch to Hulu. Or just wait until Apple has a streaming solution. We just went through a price increase. Now they are the new cable. No compelling content at a crapy price.

      1. I had fortunately already cancelled netflix for Hulu. Absolutely no regrets. I can do a month of Netflix twice a year and catch up on their stuff that I care about. When they intro’d foreign language content in my RECOMMENDED section, I had my fill of them.

    3. You are right that original programming costs a lot George. Unfortunately so much of it is completely forgettable.

      To me, live sports and local community content is highly valuable. A few other channels offer an occasional intellectual stimulating show. The other 250+ channels are entirely vapid and pointless.

  1. With all the other streaming services available, it will be hard to justify paying more for Netflix – a service I’m not using as much anymore.

  2. If they increase prices again already I’ll be canceling my Netflix subscription these fees per channel so to speak are out of control. There’s no need for Netflix to raise their prices already they need to get their in-house shop together.

  3. Stan needs to hold firm on prices and perhaps gain market share. In all events the Oz paid streaming market seems to be developing into a duopoly between Netflix and Stan.

  4. There will be another backlash if Netflix attempts another fee increase.

    A solution: Tiers of membership.

    Netflix would hate it as it would add significant complexity at their end. It’s growing pains as users slowly eviscerate the nasty cable TV biznizz. It’s a new series of ‘TUBES’.

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