In Related News: Lots of People are Full of It.
by John Dick, CEO of CivicScience, Inc.
Earlier this week, Netflix announced that it would be raising its subscription prices by $1-$2 per month. The change will affect new subscribers soon, while current subscribers won’t see the increase in their bill for a year or two. Lots of Netflix subscribers flooded social media with outrage (Just remember that these vocal Tweeters and Facebookers are not necessarily representative of the average consumer). Some in the media viewed the price increase as a good thing for subscribers, arguing that more cash in Netflix’s coffers will enable them to improve their content and service.
But how is the broader consumer population reacting? We did our best to figure that out…
In the past few days, we surveyed 1,421 adult Netflix subscribers across the US, asking them how they are reacting to the news. In all, 66% of Netflix users said that they “don’t think it’s a big deal” and that it won’t affect their likelihood to continue using the service. 34% of subscribers, on the other hand, said that they “may cancel their subscription as a result.”
Age and household income were the biggest drivers of opinion. Over 52% of respondents aged 18-24 and 48% of respondents aged 18-34 said they may cancel when the price increase takes effect. Conversely, only 10% of subscribers over age 44 are threatening to cancel.
When we crossed the question with income levels, we found that people making between $50-75K per year were the most likely (at 42%) to say they may quit the service. Interestingly, the numbers were fairly even across all other income categories, when we might have expected the highest-income respondents to be the least concerned.
Then, for good measure, we surveyed 1,497 non-Netflix subscribers to see if the price increase might affect their willingness to buy the service in the future. 10% of those non-subscribers said they are planning to subscribe to Netflix eventually and that the price increase won’t affect their decision. 32%, however, said that the price increase may dissuade them from ever joining Netflix. 58% said they aren’t Netflix subscribers, “never will be and don’t care.”
As opposed to the subscriber results, it was actually the older non-subscribers who claimed the price increase would be a deterrent. 40% of respondents over age 44 said that they are less likely to become Netflix subscribers as a result of the increase.
It’s really hard to take the stated intent of these potential Netflix cancellers very seriously. It will be a year or more until the change takes effect. By then, Netflix will have most likely significantly grown its content library, added to its revered original content, and improved the speed and usability of its service. Will it really be worth leaving that for $1 or $2 per month? Probably not.
Still, at the very least, these early numbers signify that a lot of Netflix subscribers are mad enough to threaten to leave. Fortunately for Netflix’s sake, they have a lot of time to make amends or simply let it blow over. The harder challenge will be to appeal to a group of potential new subscribers who have been on the fence about the service and now appear at least slightly less likely to join. It’s quite possible that most of those dissuaded non-subscribers were either never going to join anyway or will join, despite their protests, nonetheless.
We’ll just have to stay tuned.