ByMark J. Guillen, writer at

UBS survey shows that nearly 41% customers will cancel their subscriptions if Netflix implements its price hike.

Netflix Inc. announced last week that it would soon be implementing the new prices for its standard streaming plan from next month. Reportedly, a price hike is set to be implemented after two years for the customers who were previously exempted to pay the raised prices. It clearly told in 2014 that it would allow the existing customers to have the standard streaming plan at $7.99 whereas the new customers paid $8.99 and it mentioned to retrieve it in two years’ time. Now it is time for recollection.

The letter of the company said:

In Q2 and Q3, we'll be releasing a substantial number of our US members from price grandfathering on the HD plan and they will have the option of continuing at $7.99 but now on the SD plan, or continuing on HD at $9.99 a month.

Almost 80% of the affected streaming subscribers are not aware of this price hike. Nearly 37% of the total Netflix customer base in the United States will face the price hike from the next month, and after already facing growth issue in the region this might become another hurdle. This is an unpleasant realization for the subscribers, as Netflix reminded the shareholders again in a letter. Subscribers are not fond of price hikes.

Considering the new streaming options offered by its domestic rivals such as Amazon Prime Video, Hulu, and premium cable networks including Time Warner’s HBO, the subscribers of Netflix might choose a different alternative that would be cheaper and better for them.

UBS analysts say that more than 41% of the affected subscribers have mentioned to cancel their subscriptions once the price hike is implemented. According to the survey conducted by UBS, customers are not willing to accept any price increase for the streaming service. It is unclear whether UBS surveyed only the customers who will be affected from the price hike or the overall United States customer base, but the research firm is confident of the fact that customers will not leave once the price hike hits them.

A spokesperson of Netflix said in an interview to Wired:

Later this month, members in the UK will begin to be un-grandfathered. Beginning May, the price update is rolling out elsewhere based on member billing periods. Impacted members will be clearly notified by email and within the service; so that they have time to decide which plan/price point works best for them.

Netflix is quite serious about this action. Many analysts believe that the customers will not leave the company irrespective of the price, as the original content — which it is coming up with — is too good. On the other hand, people say that the streaming business is looking to recollect for its original programming but it will not compromise on the quantity or the quality of its content.

Netflix or not? What's your decision?


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