Survey: Netflix Subscribers Sensitive to Price Increases

At $1 more a month, 16% of Netflix subscribers were likely to either downgrade or cancel their subscription, according to a survey by The Diffusion Group (TDG) conducted just before the service’s price increase announcement Jan. 15.

Netflix upped its monthly basic $7.99 single-viewer, non-HD plan to $8.99, standard $10.99, two HD streams plan to $12.99, and premium $13.99, four-stream HD plan to $15.99.

Those price hikes might have consequences, according to TDG’s ninth edition of Quantum Viewing Behavior, a survey of 1,940 U.S. adult broadband users completed in December 2018.

In the survey, at an increase of $3 a month, the rate of likely cancellations doubled, while the rate of likely downgrades tripled. At an increase of $5 a month, likely cancellations grew to 38% while likely downgrades tallied 17%.

“While TDG believes that Netflix will endure any short-term backlash from these increases, it is undoubtedly reaching a level of price resistance across all tiers,” said Michael Greeson, president of TDG, in a statement. “At an average increase of $3 per month, 33% of Standard tier subscribers are likely (though not certain) to downgrade to a less expensive plan and 10% are likely to cancel the service altogether, compared with 28% and 6% of Premium tier subscribers, respectively. These variances are not insignificant.”

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