Netflix Implements a Price Hike — Will It Exacerbate the ‘Cord Cutter’s Dilemma’?

Oct 5, 2017  •  Post A Comment

Netflix unveiled plans today to raise prices on its U.S.-based streaming plans, a move that The Washington Post notes will help pay the bills for the expensive programming that has fueled the service’s surge in popularity.

“The cost of the streaming video giant’s basic plan, at $8 a month, will remain unchanged,” The Post reports. “But its standard plan will now cost $11 a month, up from $10, and the premium tier will rise from $12 a month to $14. The prices are already in effect for new sign-ups and will be rolling out to existing customers later this month, Netflix said.”

In a statement, Netflix said: “From time to time, Netflix plans and pricing are adjusted as we add more exclusive TV shows and movies, introduce new product features and improve the overall Netflix experience.”

The Post adds: “Beyond its immediate impact on subscribers, the price hike foreshadows a future in which the streaming video market is dominated by a handful of players that have captured the majority of a family’s limited entertainment budget.”

The report references something it calls the “cord cutter’s dilemma,” explaining: “This is the logic that prevents some consumers from ditching cable: At a certain point, the cost of an Internet plan plus various streaming services equals the price of the traditional TV bundle, or at least is competitive enough that it’s mostly a wash.”

The report adds: “The other alternative for streaming services may be a ‘cable-ification’ of online video, in which some companies act as a one-stop shop for multiple streaming services. Amazon Channels is one example, where Amazon Prime members may use Amazon’s payment system to choose access to HBO, Showtime, PBS and other programming, which users then pay for on an a la carte basis.”

One Comment

  1. Reed Hastings is a fool.

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