Netflix Hits Users With Another Round Of Price Hikes
from the meet-the-new-boss... dept
It’s been obvious for a while that the future of internet television is starting to look increasingly like traditional cable. Initially, the streaming sector was all about innovation, choice, and lower costs to drive subscriber interest. But as the market has matured and become dominated by bigger players, some familiar patterns have emerged, including giant companies trying to lock down as much content as possible in exclusives, and a steady parade of price hikes that slowly, surely, start to erode the value proposition.
Last week Netflix announced that the company would be imposing yet another price hike. Here in the U.S., the company’s 720p “basic” tier is increasing $1 to $10 per month, its 1080p “standard” tier is increasing $1.50 to $15.50 per month, and its 4K “premium” will see a $2 increase to $20 per month. Similar hikes are also on their way to Canadian subscribers. In a statement, Netflix justified the hikes using familiar rhetoric about “improving the customer experience”:
“We understand people have more entertainment choices than ever, and we?re committed to delivering an even better experience for our members,” the statement said. “We?re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always, we offer a range of plans so members can pick a price that works for their budget.”
Granted every time the company imposes a rate hike, folks act as if the world is falling. Back when the company bungled its “Qwikster” DVD unit spin off and imposed price hikes there were no shortage of critics insisting the company was doomed. But for now, consumers continue to find the value proposition streaming offers to be worthwhile, especially in comparison to the still high prices of traditional cable TV options. Streaming still generally sees the kind of customer satisfaction ratings traditional cable companies can only dream of.
But the price hikes that have hit streaming TV services (especially live streaming services) haven’t been without repercussion. Not only did more customers cut the traditional TV cord last year, streaming TV services saw a significant reduction in growth. Netflix itself saw a significant drop in subscriber growth across 2021 and a loss in total subscribers in the U.S. and Canada, in no small part due to a 2020 price hike.
With the pricing for live streaming TV services like YouTube TV increasingly looking more and more like traditional cable, and the hunt to lock down exclusives driving increased confusion among consumers trying to find their favorite content, there continues to be a real risk the entire sector simply forgets to learn anything from the plight of traditional TV. As in, keep pushing price hikes for the same or an eroded value proposition, and you can expect a lot of potential subscribers to move to alternatives… whether that’s over the air broadcasts using an antenna, or TikTok.