Netflix Prices Rise: 3 Ways It Can Keep Customers on Board
After warning customers it was coming, Netflix (NASDAQ:NFLX) has announced it will be raising prices on its streaming media service by $1 for new customers. The new price is now set at $8.99 for incoming customers, a price that is still completely reasonable considering the wide range of options available on the Netflix platform. The company is approaching the price increase delicately, as consumers didn’t take kindly to past price increases or announcements regarding product changes. The new $1 price bump shouldn’t be followed with the same backlash, but as many have witnessed, comes most likely in response to turbulent and uncertain times for tech companies.
First, competition for on-demand streaming services is ramping up, with rivals like Amazon (NASDAQ:AMZN) reinvigorating its Amazon Prime service to include a smattering of HBO programs, original content, and more. Amazon might present the biggest and most resourceful challenger on the slate, but Hulu Plus is still around, adding its own original content and fresh shows from broadcast and cable networks. Apple’s (NASDAQ:AAPL) Itunes offers viewing options as well, although on a more à la carte basis. Even Google (NASDAQ:GOOG) looks primed to enter the fray, with viewing options already available through its Play store. While competitors are turning the industry into an arms-race of sorts, Netflix has needed to add to its own arsenal, signing expensive content deals to keep fresh selections available for viewers.
Secondly, Netflix has been under pressure by consumers for the quality of its streaming service, and finally had to succumb to mounting pressure and cut a deal with Comcast (NASDAQ:CMCSA) to keep its content moving at an acceptable pace. The ongoing turmoil over net neutrality rules further complicates things, as does Comcast’s pending merger with fellow internet service provider Time Warner Cable (NYSE:TWC). Depending on which way the FCC decides to rule on net neutrality, Netflix may have to pour more resources into making sure its content reaches customers.
Netflix is truly under fire from several directions, and yet the way the company has decided to move forward has been admirable. Rather than dumping a huge price jump on its customers (which didn’t work out so well last time), Netflix opted to have a public discussion about it, getting feedback from its users while simultaneously laying out the logic behind its decision. Few companies have done as much as Netflix to push the envelope in its respective industry, and if it can keep the respect of their customers, there’s no reason to think it will be dragged asunder by the threats of its challengers.
No company is completely invulnerable, however. For Netflix to truly plow its way into the future unscathed, certain measures must be taken. Here are three ways they can keep customers on board and continue to see growth going into the future.