Netflix recently announced they will be charging more for their services starting next month.
CEO Reed Hastings explained the price increase will be somewhere between one to two dollars for both services Netflix offers. Hastings has emphasized that in order to increase the amount of television series and movies online a small price hike is necessary.
The company believes a dollar or two more a month will not hurt customers but are proceeding cautiously nonetheless as to avoid surprising their audience.
In 2011, Netflix split its DVD rental and streaming service into two separately paid programs and increased prices by 60%. The results were a cancellation of more than one million subscriptions, plummeting approval ratings and significant stock devaluation.
The brand has since regained credibility and learned from past mistakes.
The new business approach involves rewarding existing customers by allowing them to keep their current payment plan for at least another year. This also acts as an incentive for hesitant customers to subscribe now and receive the short term elevated price exception.
Communications Professor Kenneth Plowman explained, “Netflix is doing a good job both providing information to customers, and listening to their public. Remaining adaptive and incorporating feedback is what will keep them ahead of their competition.”
The brand image of Netflix has changed in the last few years from a comfortable household benefit to a fundamental channel from which Americans consume content. Brand Index ratings for Netflix have been consistently superior to Hulu Plus, Amazon Prime, Showtime, HBO and Comcast.
For BYU students who rely on Netflix for entertainment, the price raise probably won’t change their reliance on the service.
MaLee Crouch, a psychology major from Columbia, Missouri, said, “I will continue my subscription, but if they were more specific about the new content being added I would be more willing to pay the new price”.
Jon Scott from Chicago also said he plans to continue paying the new fee. Scott, who studies nutrition, said, “It’s not a big change, but it’s enough to cause an inconvenience. I think I will stay with them for the time being.”
