"When Netflix raised prices for its DVD service back in 2011, annoyed consumers overwhelmed Twitter in snarky protest," says Josef Adalian. "Five years later, media coverage regarding prices going up for users grandfathered into older plans was so negative, the company partially blamed it for a higher quarterly churn rate. And last week, when Netflix said the cost of its most popular plan would be going up to $15.49 per month, the overall reaction was … crickets. Okay, so that’s not entirely true. There were plenty of news stories about the hike, and obviously some folks complained on Twitter. There will also surely be a percentage of price-sensitive Netflix U.S. subscribers who decide to cancel their memberships because of the increase in the coming weeks and months. We won’t really know how many until next spring, when Netflix reports its first-quarter earnings and says how many subscribers it added or lost. Overall, however, the cultural reaction to this latest example of inflationary pressure has been muted, and Wall Street actually loved the news: Netflix’s stock price moved higher in the days following the announcement. That’s probably because investors were convinced whatever money the streamer loses from cancellations will be more than offset by the higher revenues from the monthly fee increase." ALSO: Netflix has turned to price increases to raise more money because its subscriber growth has begun plateauing.
TOPICS: Netflix