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Netflix announced on Jan. 15 that they will be raising prices across all service plans for their 58 million U.S. subscribers.
Unlike the price changes in 2017, this hike will affect all three of Netflix’s streaming tiers. Its basic plan, which allows viewing on one device at a time, will go up from $7.99 to $8.99 a month. The options for standard HD on two devices and premium 4K on four devices will each have a two dollar increase to $13.99 and $15.99, respectively.
New customers will start paying these prices immediately while existing members will see the changes rolled out over the next three months. The announcement comes in the wake of another year of multi-billion-dollar spending on content.
The streaming giant has burned through tremendous amounts of money, with a reported debt of $12 billion. According to an official statement from Netflix, “We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience.”
The new prices and high spending take place as Netflix continues to face stiff competition from rival streaming sites. Hulu recently announced a price drop from $7.99 to $5.99. Disney CEO Bob Iger said of their upcoming streaming service, Disney Plus, that they intend to price their plan substantially lower than Netflix.
When coupled with the multitude of other platforms available such as Amazon Prime, HBO, Hulu, YouTube Premium, as well as the upcoming streaming service from tech giant Apple, consumers face the question of just how much are they willing to spend and what content are they willing to leave behind.
Netflix’s changes, although done with the intention of offsetting their costs, will likely cost them customers. A survey of 1,940 adult broadband U.S. users done by media research group TDG found that even a $1 price increase to Netflix services would result in 8 percent of users quitting the service all together.
One of Netflix’s largest demographics is college-aged users, with over 90 percent of college students having access to a Netflix account according to a 2017 LendEDU survey. The nature of their access varies from using their own, a friend or family member’s or a current or ex-significant other’s account.
In the interest of looking at the situation from the ground floor, a handful of Lewis students were asked for their thoughts about this price increase. Their reactions ranged from positive to wholly uninterested.
Theater major Kayla Carson and Criminal Justice major Quinn Caldwell were both okay with Netflix’s price surge. “I understand,” said Carson. “You can’t just have this platform of original tv shows and not expect them to keep producing.” Caldwell remarked that he recognized Netflix’s reasoning behind the decision. “If they’re coming up with a good idea or have good intentions, I understand,” he stated.
Senior Elizabeth Campa was less enthused with the new prices, feeling if Netflix keeps raising their prices, they’ll eventually cut most college kids using streaming services off. “Once it hits $15 [Standard plan], I’m out.”
Netflix does not necessarily enjoy universal appeal.
Senior Samantha Moffett, an English and Secondary Education major, feels that the medium has run its course, choosing instead to buy DVD copies of what she wants to watch. “Netflix is whatever,” said Moffett. “It doesn’t really matter to me anymore.”
Netflix’s spending budget is expected to climb to $15 billion this year.