I’ve refrained from talking about this since the news broke out that Netflix will, in fact, be increasing their subscription rate for the first time in years. I was waiting to form an opinion that was slightly less negative, so here it is.
The standard price has been $7.99/month since 2010, and that of course encompasses unlimited streaming of hundreds (if not thousands) of TV shows and movies with no commercials.
It’s an incredible value, and I’m actually pretty surprised the company has waited this long to start pressing their huge customer base for more cash. My theory is that they’ve waited to make sure enough people are addicted to their service, thus making this decision more profitable in that fewer people will cancel their subscription over a price increase.
The increase in question will raise the monthly rate by one or two dollars, so hovering around $9.99 a month or more. They’ve tried this in Ireland, and it has apparently worked well there for Netflix.
Reed Hastings (CEO of Netflix) argues that the price increase is crucial if they want to continue developing original content, such as House of Cards and Orange is the New Black, their biggest streaming hits in terms of in-house production. It’s easy to assume, however, that this was their game plan all along.
And I don’t have a problem with that at all. In my eyes, Netflix has consistently provided a great service at a steady price, and this is an essential move for them in order to stay afloat and continue giving us a great library of streaming media. This is especially true now that other streaming companies are providing tough competition, including Hulu Plus, Amazon Prime, Vudu and HBO Go.
But what do you think? Is Netflix making the right move here, or is this leading us down a slippery slope of customers getting gouged for money? We learned in the 80s that cable companies were absolutely capable of this…
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