Netflix closes loopholes, raises prices to exploit addicted streamers everywhere
In the beginning, streaming services offered an affordable alternative to cable and dish. Cut the cord! Relatively low cost services offered numerous ways to broaden the entertainment palette. As time has progressed, however, Netflix and its online ilk have copied the same business model by continuously raising prices in a slow form of fiscal water torture. Drip, drip, drip….
These changes are not without reason as the popularity of Netflix has fallen with the rise of competition (and the vast numbers of middle class pirates more than happy to share passwords and the cost of the service). With new competitors in the streaming arena joining seemingly every couple months, along with these price increases, around 200,000 subscriptions have been canceled, and another two million are expected to leave in the next few months. While this doesn’t seem like that much of an impact, given that Netflix has over 220 million subscribers, this dent has triggered a 22 percent drop in Netflix stocks.
In 2013, Netflix had two plans, Standard ($7.99), and Premium ($11.99). A year later, the Basic plan was introduced, taking the Standard’s value of $7.99, consequently raising the price of the Standard plan to $8.99. By 2015, the Standard plan was hit by another dollar increase.
When 2017 rolled around and prices climbed once again, the only one still unaffected was the Basic plan. The Basic plan remained unchanged until 2019, when it was increased to $8.99, all the other plans took a subsequent raise, reaching nearly $15.
The next hit to subscriber’s bank accounts happened in 2020, coincidentally during quarantine when more people were utilizing streaming services to stave off boredom. Quarantine set up a new unbreakable high for streaming services, explaining the number of companies capitalizing on the opportunity for money. New territory opened back up and Netflix searched for new ways to exploit viewers trapped in depression and bon bons while replicating that success.
Service prices should reflect the quality of that service. Netflix has undermined this by drawing more and more money from its users, only to remove all of its best qualities. Though they are excusing their behavior with promises of platform improvements (such as the new double thumbs up feature), loads of new content, a push for better, more creative storylines. The most exciting alteration, however, will arise as the company charts a new course that will set them apart from other streaming services, mobile games. These games are exclusive to mobile devices, at no extra cost. Just install Netflix and download the games through the app store, they will then be playable in the Netflix app.
Some of the games released so far include two games based on Stranger Things, along with a card game, golf, dominoes, and bowling. Night School Studio, a video game development company, has joined the Netflix team, suggesting the idea of Netflix delving deeper into the gaming department. But while they may have the budget and resources, the audience is still questionable.
One way they’re hoping to do that in the next few years is easing their cost demands by introducing a new ad-supported plan, similar to that of Hulu’s. Netflix is also trying to garner lost revenue by cracking down on shared accounts. Starting soon, account holders will be notified about and charged extra for log-ins, outside of their household, using their password. They’ve already started testing this new strategy in Peru, Chile, and Costa Rica, charging different fees (between $2-3) based on respective exchange rates.
No other streaming service is tackling this situation, one Netflix has been plagued with since its inception. Something they were encouraging merely five years ago, in order to bolster their views, and it worked. But now, this turnaround will only further push subscribers away from the company, and deprive Netflix of the heavy stream of profit they’re so used to and fond of.
By Addison Isely
Oshkosh West Index Volume 118 Issue 8
May 23rd, 2022