×

Could Netflix Raise Prices Even Higher? 21% of Users Would Pay $16 or More Per Month

Netflix is in the midst of shifting millions of U.S. subscribers to its standard $10 per month two-stream HD plan — and it blamed higher churn and lower sub growth in the second quarter in large part on the price hike.

But a new survey indicates the No. 1 subscription VOD provider still has a lot of pricing power left in its bag of tricks: 21% of Netflix customers said they would pay $16 or more per month for the streaming service, according to a survey by TiVo’s Digitalsmiths unit, which polled 3,114 adults in the U.S. and Canada in Q2 2016. Around 8.4% said they were willing to pay $16-$19 per month, with 6.5% citing the $20-$23 range, 3% coming in at $24-$27, 1.7% at $28-$31, and 1.4% saying they’d pay $32 or more.

At the same time, 29.3% of respondents said they would refuse to pay any more for Netflix than they’re currently shelling out, per the Digitalsmiths survey. And 39.1% said they would pay, at most, $12-$15 monthly (while 10.6% did not provide an answer).

For now, don’t expect Netflix to make major adjustments on how much it charges — the risk of a massive subscriber exodus outweighs any revenue upside. One disgruntled Netflix user is even suing the company over the latest price increase, alleging the company promised him a lifetime guarantee that rates would not go up.

But the survey results show that in the years ahead, as Netflix keeps adding more exclusive and original content — next year it plans to spend more than its projected $6 billion 2016 programming budget — it will have leeway to raise prices further.

Netflix’s potential runway to raise prices is also clear when you look at what people spend on pay TV. About 35% of consumers Digitalsmiths surveyed said they spend $100 or more on cable or satellite TV per month, while 49% pay $51-$100 per month; 16% said they spend less than $50 on pay TV.

Still, people today spend a lot more time watching conventional TV than streaming video. About 59% of SVOD users watch two hours or less of content on those services per day; only 4.8% watching 5 or more hours daily, according to the survey — while the average U.S. household watched about 4.5 hours of traditional TV each day in the first quarter of 2016, per Nielsen. Of respondents who use SVOD services, 92.8% do so on a weekly basis.

Meanwhile, the Digitalsmiths survey found that 10.4% of Netflix and other SVOD users don’t pay for their service because they use another subscriber’s account. While a recent federal court ruling technically makes unauthorized sharing of passwords to an internet service illegal, Netflix and other providers say such multi-user access is kosher within certain bounds.

More Digital

  • Fortnite Battle Royale

    How 'Fortnite' Fans Can Earn Loot by Watching YouTube Videos

    Epic Games and YouTube have teamed up with a special offer for “Fortnite” players — giving players of the popular battle-royale game rewards when they watch “Fortnite”-premiered content on the video platform. The catch: You have to watch at least 20 minutes of “Fortnite” special content or live esports broadcasts to receive the loot. Under [...]

  • Roku headquarters

    Roku Plans to Expand to Brazil, Other Countries (EXCLUSIVE)

    Roku plans to expand to multiple new territories in the coming months, Variety has learned. One of the first new markets for the company will likely be Brazil. An international expansion could help Roku grow its customer base, which in turn should lead to growing advertising revenues. Roku executives have been hinting at plans to [...]

  • Google Stadia Pro to Include 1

    Google’s Stadia Game Streaming Service to Include Free Monthly Game

    Google has been busy sharing additional details about its upcoming game streaming service Stadia, clearing up some confusion in the process. Stadia’s pro subscription tier, which will cost $10 per month, won’t be a Netflix-type subscription service. However, subscribers will get free games at the rate of about a title per month. That’s according to [...]

  • Crypt-TV-Facebook

    Facebook Signs Deal With Crypt TV for Slate of Five Horror Series

    Crypt TV, the digital studio founded by Eli Roth and Jack Davis and backed by Jason Blum, expanded its deal with Facebook, inking a content partnership to create a slate of five horror and monster-themed series exclusively for Facebook Watch. For Facebook Watch, it’s one of the first deals for a full slate of content [...]

  • Elaine Paul - Amazon Studios

    Elaine Paul Exits as Hulu CFO to Join Amazon Studios

    Elaine Paul has departed Hulu after nearly six years as chief financial officer to join Amazon Studios as CFO/VP of finance. She started at the ecommerce company’s studio division on July 15, reporting to Dan Jedda, VP of digital, advertising and corporate development finance for Amazon, a company rep said. Paul’s move to Amazon, first [...]

  • BritBox to Roll Out in the

    'Downton Abbey' and 'The Office' Heading to BritBox as Streamer Unveils U.K. Launch

    British broadcasters the BBC and ITV have formally agreed to launch their joint streaming service, BritBox, in the U.K. in the fourth quarter of 2019. It will be priced at £5.99 ($7.50) per month, making it the same price as the cheapest Netflix subscription in the U.K. ITV will control BritBox, holding a 90% stake. [...]

  • Vobile - ZEFR acquisition - Yangbin

    Zefr Sells Its Copyright-Flagging and YouTube Channel-Management Businesses to Vobile for $90 Million

    Vobile Group, a video protection and measurement company, announced a deal to acquire Zefr’s RightsID copyright-management and ChannelID YouTube channel-management businesses for about $90 million. According to the companies, Zefr’s RightsID and ChannelID together generated over $40 million in revenue in 2018 and were profitable. The deal stands to more than triple the revenue for [...]

More From Our Brands

Access exclusive content