Are More Netflix Price Hikes Coming?

Last week, Netflix temporarily hiked its prices in Australia, most likely to see if it would affect the number of new users. With new taxes on Netflix being implemented in many countries and states, you're likely to see your Netflix rates go up again — if the company thinks it can get away with it.

Netflix Measuring Its Value

The purpose of this test, according to Netflix, was to help determine the value subscribers place on their plan. (No subscribers were actually charged any more for their accounts, it seems this was just a change in the advertised rates for new subscribers.) Netflix changed the pricing of its three tiers by as much as $3 per month, leading some to speculate it's getting ready for another price hike.

Considering prices were just hiked last year, it seems a little soon to entertain the idea of another one. But there are changes brewing that could place additional financial burdens on Netflix, that could be passed to consumers.

"Netflix Taxes" Being Implemented

Australia is about to implement the so-called "Netflix tax" beginning July 1. It will apply Australia's 10 percent goods and services tax to things like digital content, games, and software. And last August, Pennsylvania implemented its own "Netflix tax", kickstarting a discussion that this could become a trend.

(On the other hand, streaming could become protected content. Back in February, California bill AB 252 was introduced, which would prevent local streaming taxes until at least 2023.)

We Don't Know What Netflix Learned

Netflix is notoriously private with their usage statistics, and they have no reason to publicly discuss the results of this test. But here's some things to consider: Similar to Amazon and Facebook, Netflix is a wildly popular service that is rapidly becoming like a necessary utility to many people. In this case, Netflix can raise the rates a few dollars and users either won't care much, or will make a fuss but keep paying.

On the other hand, with streaming options expanding every day and Hulu and Amazon drawing bigger talent for their original programming, disgruntled consumers might have alternatives.

Readers, what do you think about this kind of testing? How much would you be willing to pay to keep your streaming services? Sound off in the comments below!

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BlueOak

@ITNerd,

I dont need to google "Net Neutrality" - I know exactly what it is, a fake name.

I disagree with just about to everything you said for the reasons I stated.

You seem to be willing to stick your arm in the lion's mouth to save your finger.

We would not have the Internet we have today with that kind of thinking.

Lacking crony government protection, every single company that abuses its customers will lose. Every single time. You seem not to trust the free market that gave us the amazing Internet we have.

There was a time when similar thinking wanted govt to take down GM and IBM because it was felt they had too much market control. Where are GM and IBM today? They failed their customers and paid the price.

May 25, 2017

tahu300

I'm a 24 year old and I was a Netflix subscriber. When they raised their rates last year, I decided to switch to Amazon since they are $99/year and I get free 2-day shipping with Prime along with Prime Video. I think Netflix has better content than Amazon, but I can find ways to borrow it from others if I really want to see certain content.

May 22, 2017

ITNerd

@BlueOak, Net Neutrality is not something big brother lovers support. It is in fact the opposite. I agree that the best way to get rid of big monopolies is not giving them competitive advantage. Which is exactly what Net Neutrality was designed for. Google the definition of Net Neutrality. It is designed to not give advantages to any service provider or individual website or other service. I don't want (for instance) AT&T to block my Playstation Vue TV service because they want to push forward their own DirecTV Now service. I also don't want them to start throttling, me because I watch things in 4K and use more data then others. I don't want to have to choose (for example), Comcast because they allow more religious sites and Amazon, or CenturyLink because they allow more Youtube and Netflix. I don't understand what is a "scare tactic". I know these things have not happened in the past when NN was not in effect. But we have more monopolies now as well.

More power to Netflix as a business to charge a price that matches their value.

However, as consumers, every dollar they raise their price makes it less likely that we, as never before Netflix subscribers, will sign up.

We have an excellent over the air signal for digital broadcasts... and those local stations keep adding sub-channels to the point where we have decent (admittedly older) movie channels and classic TV program selections.

The excellent original and other streaming content Amazon throws in with Prime, along with an excellent new release selection of free Blu-ray movies at our library covers passive (fat-building) entertainment very nicely for us.

May 21, 2017

@ens1, Huh?

"Net Neutrality" was a huge misnomer that only big brother govt lovers would support. Your claims are scare tactics in the classic Leftist sense. They have no basis in fact.

If the govt had previously muddled in similar ways with the Internet, we wouldn't have the Internet we love today. The Internet is a wonderful example of free market success.

The only ISP monopolies there might be are those enabled and supported by us and the govt. Blame your local cable board for granting exclusive access to your market if you have no choices. Our cable board was smarter and we have three ISP alternatives.

The most effective way - in fact my the only effective way - to knock down monopolies is blowing out crony-big-corporate-loving govt control and regulation. Those crony big corporate relationships are what blocks competition from smaller players with fewer resources to compete.

The FCC has no authorization from congress to regulate the Internet. It was simply a power grab.

southbound1969

I only subscribe to NetFlix when they finally release BCS (better call saul) and I binge watch it then wait til the next year.

May 20, 2017

nimer

That's a good point, between amazon hulu Netflix showtime and hbo, one had many choices; you can technically rotate subscriptions , one or two at a time, and watch everything:-)

Netflix is great btw to binge watch shows at the end of summer; all major networks release previous season to Netflix in august to build up for September premiere

tboynew

Love Netflix but they'd better tread carefully. There are lots of competitors now. Amazon prime is a given for most people. Hulu commercial free is only $12 and HBO is $15. Right now we just stay subscribed to Netflix year round but if they raise the price we can subscribe for a month or two at a time. Lots of people cutting the cord but that means more streaming services and more competition.

May 19, 2017

ens1

It's not just Netflix, any video service that competes with Internet Service Providers will have to pay usage fees/taxes to the ISP because our government decided to get rid of net neutrality. This government does not represent the taxpayers, it represents its own self-serving interests. Monopolies NEED to be regulated since consumers only have one or two high-speed Internet options. The corrupt FCC is the reason for this mess.

@CinciShopper Netflix movie choices are limited, especially if you're looking for recent mainstream releases. It wasn't Netflix streaming that brought down blockbuster, it was the original DVD blu ray monthly subscription.

This is not to say it's bad, I have seem some of the best movies ive ever seen in my life (foreign and old) which I would have never even heard of if it wasn't for Netflix, it's just a different category in my opinion than what blockbuster used to be.

Ironically, Netflix is cutting down on their DVD monthly service; it's being upstaged by the $1 a night red box. But they are smart, for years they've even building the streaming business and now they are #1

CinciShopper

I will continue to be a Netflix customer even if they raise rates. IMO Netflix is probably one of the best entertainment bargains around. The $10 a month that I pay is not a big deal when you compare it to the $3 per movie I used to pay Blockbuster Video and I had to drive to get the movie and drive it back to return it after I was done.

$10 gets me the entire Netflix online catalog vs just a couple of titles that I had to bring back to Blockbuster in 2 days.

I used to easily spend $40 a month at Blockbuster in the 1980's. Thats if you include buying the occasional box of Skittles and late fees.

In fact, Netflix costs about the same amount you paid Blockbuster to rent 2 movies in 1985 if you adjust for inflation.

Its also less than you pay Amazon to purchase a single movie on their streaming service or for one person to go to the movie theater and buy a small popcorn.

B from C

Supply... and demand.

As the movie selection continues to dwindle and the prices continue to rise, more and more turn to other sources including piracy. IMO the only thing keeping Netflix going is the TV shows and even the "exclusives" are easily found by other means.

derekwilson85

my bad if "netflix" decides to go up on their prices again I will definitely become a part-time subscriber.

I use Hulu and the CBS app more than I do Netflix. If Hulu decides to go up on their prices again I will definitely become a part-time subscriber just waiting for new seasons of my favorite shows to be released before re-subscribing and then binge watching them at that point.

Four years, I have a Netflix membership which ran without interruption. However, I went on a trip for a couple of months and that's when I realized that you can cancel your membership, and resume it anytime without ooosingyour queue (assuming it's within 8 or 10 months I think). I'm no longer traveling, but fun myself turn it on and off based on season.

I do think it's smart to raise prices, they won't lose many customers, but I'm guessing more and more will start 'part timing' Netflix like I do