Watch Everybody Not Quit Netflix

Because it is raising rates, Netflix will lose 480,000 subscribers over the next few months! Shock!

But because of the same rate hits, its revenue will rise by $520 million, according to new research by Nomura Securities.

I suppose it's prudent for financial analysts to present stats like that. I’d bet that subscription drain will never come close to 480,000.

Other research lately has suggested viewers would pay a lot more for stuff they want to watch online. At the OTT Video Executive Summit last week, consumer panelists indicated they’d pay $2 to $15 more per episode for streaming video they want to see. That’s anecdotal, and crazy, but some bit of it is true when it comes to Netflix, which is absolutely beloved by its subscribers.

They’re not going anywhere because their monthly subscription is going up a buck or two.

In a report for BRaVe Ventures, I wrote about last week, Alan Wolk opined: “Given the wide array of TV shows and movies Netflix has available, we think the subscription price can go up to $20/month, and it will still seem like quite the bargain.”

Starting soon, about 22 million Netflix subscribers in the U.S. who are longtime subscribers and were grandfathered from rate hikes others paid, will begin seeing their bills go up. And that, Nomura says, will lead to the 480,000 defections.

That’s a piddling amount, really, but I’d bet it’s still less than will really happen.

Netflix delivers value to subscribers and fawning press lets its subscribers know it. In the first quarter, Netflix said it has $12.3 billion in programming obligations, which is 73% ahead of two years ago.

The stream of new shows, and the stream of performers and producers singing Netflix’s glories, keeps the customers satisfied.

“Netflix gets better with every passing month, something that can't be said of most cable or satellite television platforms that push out bigger annual increases on a dollar basis,” Motley Fool says in an article titled “You’re Not Quitting Over The Price Hike, So Get Over It.”

That is one of the neat perceptive tricks about streaming in its baby years. Paying $10 or $11 a month for streaming services, even when multiplied by three or four services, seems like chicken feed compared to the cable rates, which rise mysteriously and often.

Cable rates have gone up 8% a year since 2010, says one study from the Leichtman Research Group. Meantime, Netflix basks in this video era of good feeling. Even as Netflix subscription growth slows, its lock on the market is absolute.

3 comments about "Watch Everybody Not Quit Netflix".
Check to receive email when comments are posted.
  1. Ed Papazian from Media Dynamics Inc, June 22, 2016 at 3:52 p.m.

    Like everyone else who sells program content in exchange for subscription fees, Netflix experiences a "churn" problem as a certain percentage of its subscribers---especially those whoi move to a new address away from their current locale----drop the service and need to be replaced with new recruits. Of course, this will not apply to 100% of Netflix's subscribers however, over time it is likely that rival offerings by competing SVOD players such as the new Hulu three-network small bundling initiative and the likely counter by CBS and its possible partners, will cause attrition in Netflix's total coverage. If it continues to raise rates, this will speed up the process.

  2. Jeffrey Hardy from FilmProfit, LLC, June 22, 2016 at 7 p.m.

    I am sorry, Ed Papazian, I am scratching my head to see what address changes have to do with NetFlix, unless you have some data that says when folks move, they drop connectivity, or when they move they automatically get poorer. With cable, the move leads to cord-shaving and cord-cutting and attrition, due to having to get installation, pay install fees, go to college, leave college, and so on. Is that true with Netflix, if not, as I suspect (don't know for sure, but doubt highly), then how does this moving impact Netflix. Netflix goes on the road with almost everyone, and to their mobiles, etc. Hmmm...

  3. Ed Papazian from Media Dynamics Inc, June 23, 2016 at 9:27 a.m.

    I'm sorry, too, Jeffrey, but its a well established fact that when people move to a new location, some of them do not automatically renew their cable service subscrpition and I assume that this, too, may play a part for SVOD subscriptions. Note, I didn't say that everyone who moves will cancel Netflix, nor did I say that everyone who moves suddenly falls into the low income category.

    As regards how Netflix is accessed by its subscribers, it is well known and comon sense would confirm this, that mobile phones do not play a major role. Sorry, but Netflix is mostly a larger screen medium----by virtue of the types of content it offers.

Next story loading loading..