Netflix Increased Pricing Still Draws Customers

Netflix Effective Jan. 14, 2019, Netflix raised its prices 13 to 18 percent for new subscribers. The price increase is not likely to cause consumers to cancel their accounts, mostly because they are already hooked on the service.

According to The New York Times, this is the most significant increase in pricing since Netflix launched its streaming service online. The new prices are still far below its rivals.

The most popular plan which gives customers streaming of two screens simultaneously will increase to $13 a month from $11. This compares to HBO GO of about $15 a month. The $8 a month plan will increase to $9 and the version that allows four screens will increase from $14 to $16 a month.

Netflix was founded in 1997, by Reed Hastings and Marc Randolph in Scotts Valley California. The primary base of the company’s business was a service offering online streaming from a library of television programs and films.

As of October 2018, they had more than 137 million subscribers is available worldwide with the exception of Mainland China, North Korea, Syria, and Crimea.

Initially, their business included DVD sales and rental by mail, but soon the company decided to focus on the DVD rental business.

In 2007, they expanded business with the introduction of streaming media while retaining the rental service of DVDs and Blu-rays. In 2010, the company grew internationally making streaming available in Canada, along with the Caribbean, and Latin America.

The debut of Netflix first series was “Lilyhammer” in 2012, which officially entered them into the content production industry. Both their production and distribution of film and television programming has dramatically expanded since 2012, and they offer a variety of original content through their online Library.

In 2016, they released an estimated 126 original series and films, this is more than any other cable or Network channel. As of September 2017, the company racked up billions in debt due to their efforts of introducing new content and securing the rights for additional content from over 190 countries.

Currently, Netflix has exclusive pay-TV deals with several Studios, and they also have exclusive streaming rights from these deals while maintaining the structures of traditional pay-tv terms.

When Harvey Weinstein was charged with sexual abuse allegations, Netflix chose to withdraw from co-hosting the 75th Golden Globe Awards with Time Warner Cable. That terminated the partnership with film studios such as Sony Picture Animation and the Walt Disney Studios.Netflix

Netflix rise has affected the way audiences watch television; it allows users the freedom to watch shows whenever they desire. Episodes no longer need cliffhangers to tease the audience tuning in week after week. They can continue into the next adventure immediately.

Their model platform provides flexible run times for episodes based on a storyline. This eliminates the need for the week-to-week recaps with no fixed notion of what constitutes a season. It allowed the flexibility to deviate from traditional forms giving them an advantage over other networks.

According to a 2013 Nielsen survey, the Netflix model has affected viewers expectations. More than 60 percent of Americans say they have binge-watched their favorite TV shows. Eight out of ten Americans use technology to watch their favorite shows free from the scheduled broadcasting time.

As of now, it appears that Netflix will continue to stomp its competitors. Even with the price shift, their customer base is continuing to climb.

Written by Tray Dingle
Edited by Cathy Milne-Ware

Sources:

Thrillist Entertainment: Why People Hated Netflix When Streaming Launched
Variety: Netflix and Weinstein Company: Closer Than ‘Arm’s Distance’
Forbes: Netflix’s 13% To 18% Price Increase Offers Apple A Lesson

Featured and Top Image Courtesy of Michel Ngilen’s Flickr Page – Creative Commons License
Inset Image Courtesy of Thomas Hawk’s Flickr Page – Creative Commons License

 

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