In today’s installment of news to file away in the “water is wet” category, a new report out from consumer research firm Attest identifies what might be behind the more than 1 million subscribers who canceled their Netflix accounts during the first two quarters of this year.
The likely culprit? Not your favorite show getting canceled. Nor favorite TV shows and movies leaving the service. In all likelihood, it’s the price hikes that the streamer enacted earlier this year. That, combined with the inflation-ridden economy we’re living in at the moment.
Impact of Netflix account price hikes
Subscription inertia is such an entrenched force that I actually had to consult my last credit card statement to see where my Netflix account price currently stands (it’s $16.96/month). As far as Netflix itself, the streamer announced its latest account price hikes at the beginning of the year. The company started rolling them out at the end of the first quarter.
In the main, one takeaway from the Attest report is that it’s not necessarily that Netflix has a content problem. At least, not one that would lead a critical mass of people to cancel their Netflix account.
Sure, there’s always an outcry — and promises of service cancellation — when a fan-favorite title gets axed (See: The response to the fate of First Kill). By and large, though, the first two quarters of the year — the time period that saw a huge wave of Netflix account cancellations — included some of Netflix’s biggest and most-anticipated content. New seasons, for example, of shows like Ozark and Stranger Things.
“This may help to explain the subsequent drop-off in viewers on the platform last quarter, especially as wider inflationary pressures further reduced Americans’ purchasing power and disposable income,” said Attest CEO and founder Jeremy King about the price hikes, according to Forbes.
“With many other rivals potentially planning their own price increases in the future, the data ultimately shows how sensitive consumers currently are to even a small change in price. It also points to a potential end to Netflix’s monopoly over the streaming industry, with consumers reevaluating who deserves their business.”
Prices going up — it’s like cable all over again
In related news, it’s not just the price of a Netflix account that’s more expensive. One of Netflix’s fiercest competitors is also raising prices.
The US launch of the Disney+ ad-supported subscription tier is coming on Dec. 8 (for $7.99/month). That will bump up the current ad-free tier 38%, to $10.99/month. Both the ad-supported and ad-free versions of Hulu will also see a price hike, as well.