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Netflix premium subs ‘considering downgrade’ after price hike
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Few Netflix US viewers will cancel their subscription after the company’s price hike last week, but over a quarter of Premium subscribers are considering downgrading their plan, according to Hub Entertainment Research.
Netflix administered its highest ever price hike in the US last week, bringing a Premium and Standard subscription up by US$2 a month and a Basic Plan up by US$1 from US$7.99 to US$8.99.
Hub Entertainment Research surveyed 415 US consumers following the news. The results show that few consider dropping their account after a price hike, but the risk lies in higher tiers looking to downgrade.
Most Netflix subscribers say they will stay with their current plan, with 69% noting that they will keep their subscription as it is. Only 9% say they’ll drop their Netflix sub entirely, while 16% say they’ll drop to a lower tier.
Basic subscribers are at a very low risk with 76% saying they’ll keep their current plan. Meanwhile 24% of Standard subs say they’ll downgrade to a Basic plan and 27% of Premium subs say they plan to downgrade.
The research firm also measured the sentiment respondents had to the news, with 8% saying they are “angry” about the hike, 38% saying they are “annoyed”, 39% noting that they are “accepting” and 15% seeing it as “positive”.
“This research shows that Reed Hastings is right when he says that consumers choose based on value, not just price,” said Jon Giegengack, principal at Hub. “Despite the increase, the great majority of customers say they’ll keep their subscription. However, the fact that half are unhappy shows that Netflix can’t raise prices indefinitely, and that higher fees make delivering on the promise of high-quality exclusive content more important than ever.”
Just two days after the price hike was announced, 70% of the respondents said that they had heard about it.
The research echoes the findings of US-based research firm The Diffusion Group, which revealed that few customers are likely to cancel their subscription entirely, but 25% of higher-tier subscribers may look to downgrade their plan.
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