Caption: Watching Netflix on a laptop - Source: Pixabay
What Would Be the Impact of a Netflix Price Rise?
Fans of the hugely successful streaming service Netflix were hit with the news recently that the corporation is considering raising its subscription fee. Subscribers currently pay a fee ranging between £6 and £10 per month for access to the service, depending on how many devices they wish to watch with simultaneously. The fee also depends on how many permitted users the bill-payer grants access of the account to.
Reasons for this price hike are not particularly clear, though it should be remembered that Netflix have always championed original, high-quality content, on demand, that gets us hooked. For instance, they budgeted around $8 billion in 2018 to be spent on new shows and films. It may be that raising subscription fees was always a part of their business plan to claw back some of this cash. Some customers around the world have already received an increased bill and US subscribers will start to receive higher bills very soon.
Netflix has revolutionised the way we stream content. Before they came along about 20 years ago, most of us were still buying DVDs, and even if we were streaming, most people were doing it illegally. The cost-effective and convenient subscription to Netflix gave every man and his dog the reliable access to great quality programming, new and old, with at least one or two shows that are universally liked. It was a must-have for every household, to the point where Netflix is now a part of the furniture, a button on the TV remote and a go-to when there is ‘nothing else on.’
So many of us rely on this global phenomenon that the price rises will affect all of us. The question is: will it have any effect on our viewing habits?
The battle for streaming supremacy
In spite of their overwhelming success, Netflix have not been alone in providing us great quality programming for a monthly fee, and in 2019 their rivals are mobilising. Chief among these are Amazon and Google, who are releasing their own cloud-based streaming platforms. Amazon Prime is already the closest of Netflix’s underlings, with a similar commitment to investing huge sums in quality shows.
Similarly, Apple are close to launching their TV+ service, which will feature such stars as Steve Carell and Oprah Winfrey in its opening library of content. No doubt the TV+ will appeal to Apple’s consumer champions, who have shown they will always willingly pay more for a service with a half-eaten apple logo on it.
Finally, Disney, NBC and WarnerMedia are all supposedly working on their own streaming platforms to rival Netflix. Indeed, Disney has also threatened to pull lots of its projects, such as Marvel superhero films, away from Netflix in anticipation of the two corporations becoming rivals rather than bedfellows. Movie franchises such as the Avengers series that were big draws to Netflix could soon be removed.
Caption: For now, Avengers is still available on Netflix
These competitors will all have learned from the successes (and failures) of the Netflix model as they implement their own services, meaning that they are likely to come in at a similar monthly cost to the now potentially more expensive Netflix service. Couldn’t Netflix have undercut its rivals ahead of time? Why has it chosen now to raise its prices, when it could have cornered the market for five more years? The answer could lie in its mounting debts, but it is unlikely that the company is in financial peril. When you have 104 million subscribers worldwide, you probably get a lot in the way of leniency from the bank.
The battle for attention online
Netflix has long been a mainstay on our desktops and phone or tablet homepage – something we need to have at our fingertips for when we need some Netflix & Chill. Appealing to consumers was always simple for the streaming giant, given that it rose to dominance on the back of its reliable service, provision of fresh content and by being affordable for everyone. It is likely that removing this latter consideration from its arsenal of positives, other forms of entertainment online could begin to capture our attention. On top of this, Netflix has already started to court controversy with its viewership in recent months, particularly by cancelling the niche yet popular series Santa Clarita Diet. It is only a matter of time before frustration at these irksome decisions turns to discontent and prompts users to find other outlets for their available bandwidth.
Caption: Using a mobile device on the go – Source: Unsplash
This is because the rivals to Netflix don’t merely subsist of streaming services. There are all kinds of online services vying for our attention when we are enjoying some downtime. Few are more successful in 2019 than iGaming. If we are not reliving the thrill-ride that was Breaking Bad, we are playing its themed slot game on an online casino. And the best thing – iGaming services are usually subscription-free. They can be played anytime, anywhere, at your convenience, in-app or in a mobile-friendly online suite. Many disillusioned Netflix subscribers may begin to consider whether their subscription fee might be better spent here.
Bingo online is a prime example of a game that is subscription-free and that is booming in popularity. The immense variety of games all available from a single service means that it can compete with Netflix for your attention and hold onto it too. New players are welcomed with rewards, while there are a multitude of bonuses, challenges and competitions to enjoy, as well as themed games based on popular shows like Love Island.
iGaming is proving a huge draw for those enjoying downtime online and all time spent playing bingo or slots is time spent away from dedicated streaming services – the bane of Netflix. It isn’t necessarily cost or quality that cause us to unsubscribe. If we find that we simply don’t use something enough anymore to justify keeping it, we get rid of it. Pushing its users away could therefore come back to bite Netflix if they are not careful.
In the UK, it would seem Netflix price rises are just around the corner. Money Saving Expert reported recently on some customers being quoted prices that were three pounds per month more than the current UK rate for the equivalent service. Netflix explained that these were ‘value tests,’ designed to gauge our reaction to such a cost. At this time, apparently, no UK price hike like this is in the offing. It is difficult to envisage how the value test will not lead to them rolling out the increased prices for all of us in time. Whether or not Netflix has garnered enough loyalty from its consumer base to stop people leaving will become clear in due course.
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