Netflix Price Hike Might Cost Them 12% of Dual-Subscribers

Josh WolfordBusinessLeave a Comment

Share this Post

Maybe there was something to Reed Hasting's shock about the level of outrage from subscribers following the recently announced price changes.

In this week's earnings call, Hastings said that he was surprised that there wasn't more of a backlash from angry Netflix users. Basically, "why aren't you guys more pissed off?"

From my perusal of the internet response, I came to the conclusion that people were pretty peeved. I mean, I can't tell you how many tweets, blog comments and Facebook posts I saw that read something like "F*ck you, Netflix, I'm gone."

But according to a new survey by The Diffusion Group (TDG), people might not follow through on their original anger. Although 70% said that they were upset by the new Netflix pricing structure, TDG predicts that only about 12% to 15% of streaming/DVD subscribers will cancel their membership altogether. For Netflix, that would come out to a loss of 2 to 2.5 million subscribers.

This definitely seems like a manageable loss for the company to take if the pricing changes help them move forward in their new direction - eliminating DVDs in favor of streaming-only.

What will dual subscribers actually do, if most of them will stick with Netflix at least in some regard?  Here are some more stats from the survey -

  • 34% are likely to cancel the streaming service and keep the DVD service
  • 44% are likely to cancel the DVD service and opt for streaming only
  • In all, 37% say that they are debating cancelling some part of their Netflix package
  • Of those who choose to cancel their Netflix subscription, 42% said they would be relying on Redbox in the future, 17% would turn to Hulu plus, and a small percentage would switch to iTunes or Blockbuster for their movie needs

This seems to work out in a predictable manner. More people are planning on cancelling the DVD portion of their plans as opposed to the streaming. This confirms the eventual goals of Netflix. In the earnings call, he dropped the stat that almost 75% of new subscribers are going streaming only.

Of course there are some people who will hang on to the physical DVDs for a while - hence the 34% who said they would cancel streaming. Netflix's streaming catalog is not extensive enough right now to carry the entire business. People will want more. Netflix will be hard at work in the upcoming months licensing new content.

In other Netflix news, the company is making some strides in their Non-American markets. Yesterday, they announced that they will offer Facebook integration in Canada and Latin America (the U.S. integration is being held up by a legislative decision). And today, they announced a new streaming deal that brings Showtime and CBS shows to Canada and Latin America.

[Lead Image Courtesy Cheezburger Network]
Josh Wolford
Josh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf

Leave a Reply