Streaming giantNetflix Inc (NASDAQ:NFLX) added 9.33 million net new paid global subscribers in the first quarter.
But an imminent plan price hike could push people away or to cheaper plans, recent data reveals.
What Happened: Benzinga recently polled its readers to ask what they would do if Netflix raises its prices. Here are the results.
"If Netflix raises prices on its streaming plans, what would you do?" Benzinga asked.
- Cancel membership: 55%
- Move to ad-supported tier: 10%
- Keep subscription if $1 to $3 price increase: 24%
- Keep subscription no matter what: 11%
More than half of Benzinga readers polled are ready to cancel their membership if monthly costs rise.
However, a portion of Netflix subscribers will likely keep their plans if the price increase is minimal ($1 to $3) or opt for the ad-supported tier.
Benzinga asked a similar question on X in March. Here are the results.
"If Netflix increases their price by $5/month, what would you do?"
- Cancel: 58.3%
- Pay It: 20.1% Swear: 11.2%
- Cry: 10.4%
The poll had similar results of around half of subscribers ready to cancel their Netflix plans if prices rise.
Why It's Important: Consumers report spending more monthly on streaming plans and many are ready to get rid of platforms.
Netflix last raised prices on its Standard plan in the U.S. in January 2022. A potential price hike was one of the many items analysts and investors were watching for in quarterly results from the company.
The streaming company didn't announce a price hike, but consumers still fear one is coming, which comes as
Netflix shared in its fourth-quarter shareholder letter that price hikes were likely coming to the U.S.
"As we invest in and improve Netflix, we'll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service," the company said.
Netflix raised the prices of its Basic plan from $9.99 per month to $11.99 and Premium plan from $19.99 to $22.99 in October 2023 for U.S. subscribers.
The popular Standard plan, which is priced at $15.49, has not increased since January 2022 when the plan went from $14 to $15.49.
The streaming market remains competitive. Consumers often subscribe to plans with the largest content libraries and the platforms with the best content. Netflix has traditionally ranked well in both categories of content library and must-see content.
With Netflix having the ad-supported plan available for $6.99 per month, the company could see less people completely leave their streaming ecosystem.
NFLX Price Action: Netflix shares are trading at $549.51 at last check Monday versus a 52-week trading range of $315.62 to $639.00. Shares of the streaming company are up over 70% in the last year.
The study was conducted by Benzinga from April 18, 2024 to April 19, 2024, and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from 217 adults.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
