It’s time to review another Netflix price increase. I received my seemingly annual notification that my price is going up. Here are a few thoughts:
The Good: They once again blame increasing costs, “bring you more great entertainment.” Always smart. I also think getting us in the habit of accepting a price increase annually is smart if you can get away with it. Keeping a price for a long time and then raising it is more of a shock to customers.
The Bad: They didn’t do anything nice for their subscribers. Previous price increases were announced for new subscribers, but existing customers kept the lower prices for some period of time, like 6 months.
The Risky: I’m sure they know more about their business than I do, but it seems to me they may be at risk of losing customers with this one. There are so many streaming options now. I don’t know about you, but I have a hard time finding something I want to watch on Netflix. I’m thinking about canceling and then resubscribing in a year after they release more episodes of my favorite series. I can’t be the only one.
The Grapevine: I heard someone tell me they tried to cancel and Netflix offered to keep their old price. If this is true, it’s a very good strategy. The only downside is that if it gets out, everyone will try it and their price increase won’t have the impact they hoped for. Maybe I’ll try it and let you know.
The Lesson: Every time you raise prices on your existing subscribers, you cause them to rethink their decision. Without a price increase, I wouldn’t consider canceling Netflix. The increase caused me to rethink. This is true for your subscribers as well.
