OnDemand WTP Pricing Research

Netflix Could Lose 8% of Consumers with $1 Price Increase: Study | Multichannel

If Netflix increases its monthly subscription price by $1, 8% of surveyed broadband users told OTT research company The Diffusion Group (TDG) that they’d quit the streaming service.

Another 8% said they’d downgrade to lower service tier.

This notable information came from a survey of 1,940 adult U.S. broadband users conducted by TDG in December, about a month before Netflix announced actual across-the-board price increases of $1 – $2 a month.

Related: Netflix Raises Prices as Consumer Subscription Spending on OTT Tightens

The subsequent TDG report, “Quantum Viewing Behavior,” didn’t indicate how many of the 1,940 polled subscribe to Netflix.

Earlier this week, Netflix announced that it was upping the monthly price of its base one-stream, standard-definition package from $7.99 to $8.99; the $11.99 two-stream HD package is going up to $13.99 a month; and four-stream 4K/HDR high-end tier, formerly $13.99, is spiking to $15.99.

While it had foresight to see Netflix’s price increase coming, and poll consumers on it, TDG did not as its sample what a $2-a-month hike might convince them to do. However, TDG said that a $3 rise caused 16% of its polling sample to say it would quit Netflix; another 22% said they’d downgrade service with a $3 monthly spike. Similarly, a $5-a-month increase would disrupt 47% of the base, with 22% heading for the exits.

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Netflix Could Lose 8% of Consumers with $1 Price Increase: Study – Multichannel.

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