Why Netflix’s price increase isn’t going to kill you

Why+Netflix%27s+price+increase+isn%27t+going+to+kill+you

Brittney Christ

A one dollar price increase causes a frenzy in the Netflix customer base.

People all over the U.S. have been freaking out about beloved Netflix raising the price of the two-screen plan…by $1.

Americans have been quick to point out the price increase and freak out about a measly dollar.

Only a minor portion of people seem to understand that Netflix raising its most popular plan by $1 is not only necessary for business but is in reaction to Netflix users abusing their plans.

The only plan that is being raised $1 is the two-screen plan. If you haven’t guessed it, Netflix raised the prices not only because they had a low third quarter but also because Netflix users were password sharing.

Most college students have been guilty of this at some point. You love to help out your fellow friends. Why not just split a Netflix account? You can both watch at the same time, which is why most people tend to share this popular account plan.

But because you thought sharing is caring, Netflix decided to raise the price of their most popular plan.

The reality is that an extra dollar is not going to hurt your wallet. However, Netflix has already lost 1 million customers. Most people don’t realize the price increase for current customers is going to commence next May, so they are canceling over six months in advance of the price increase for their account.

The good news is the price increase affects only new customers currently.

Not to mention, many companies have to raise their prices occasionally. For example, Starbucks seems to be always raising drink prices, and “over the next five years, Starbucks will grow to nearly $30 billion in annual revenue with more than 30,000 stores globally,” according to its Global Chief Strategy Officer Matt Ryan.

The average price of an expanded basic cable package is $64.41 (without internet, recording capabilities or cost for equipment and fees), and the most elite Netflix package is $11.99.

The $11.99 Netflix family plan includes streaming available on four screens simultaneously and Ultra HD.

In addition, Netflix reported 29.17 million paid subscribers in the U.S. for the first quarter of 2013, which surpasses the 28.7 million subscribers that HBO had at the end of last year, reported by Forbes magazine.

Not only is Netflix on the up and up, but it is speeding into fame thanks to American culture and the internet. “Netflix and chill” has become a laughable prospect for dating, and there is even a new app that matches you up with people based on what you watch on Netflix.

It has already become so ingrained in our culture, not to mention Netflix and Redbox basically put Blockbuster and other video stores out of business.

Business is booming for Netflix and will continue to increase so surely those 1 million lost customers are just a bug under Netflix’s huge boot.