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Netflix is going to raise prices on around 17 million of its standard accounts next month, and most people have no idea.
In May of 2014, Netflix began to raise the price of its standard streaming plan, first to $8.99 per month, then to $9.99. Existing subscribers, however, were grandfathered into the plan at $7.99 per month for the two-stream, “HD” quality plan.
But those days will soon be over. Next month, all grandfathered customers will be moved up to the $9.99 plan. Analysts at UBS have estimated that this change will affect about 37% of US subscribers, or 17 million people.
And most of those 17 million subscribers aren't aware of the upcoming changes, according to research by JP Morgan. JP Morgan recently ran a survey of Netflix users, and about 80% of those who will be “un-grandfathered” in May didn't know the price hike was coming.
How will these subscribers react?
UBS estimates that roughly 3%-4% of affected subscribers will cancel, though many moreclaim they will (including around 15% of those surveyed by JP Morgan).
Despite the price increase, Netflix still has a lead in “price per hour of entertainment” over pay TV. Netflix costs 9 cents per hour of viewing, while a typical pay TV package costs 30 cents per hour, according to UBS.
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