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Netflix could lose 2.5 million subscribers following rate increase

Netflix could shed as many as 2.5 million paying customers as a result of its recent move to significantly increase the monthly cost of its DVDs-by-mail rental service. Netflix announced earlier this month that it would be adjusting its monthly rate plans. Whereas subscribers had been able to stream unlimited digital content and receive DVD rentals by mail for as little as $9.99 per month, Netflix’s new combination plans start at $15.98 per month, a 60% increase. Research firm TDG polled 500 Netflix customers who subscribed to DVD and streaming combination plans at the time Netflix announced the price hike. Based on the results of that survey, TDG estimates that Netflix stands to lose between 12% and 15% of combo plan subscribers within the next six months due to the new plan pricing. That would translate to between 2 million and 2.5 million subscribers — or a minimum of nearly $240 million annually. Many subscribers who might stay around also say they intend to switch off of their current combo plans; 34% told TDG they will switch to a streaming-only plan and 44% said they will opt for a DVD-only plan. Netflix warned investors during its earnings call that the rate plan changes could have a negative impact on its business in the near term.


Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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