If it were a war, it would be termed “acceptable losses” by military brass.
A new survey of 1,5000 Netflix subscribers in the U.S. by research firm Piper Jaffrey suggests that, as long-term subscribers are transitioned to the $9.99/month pricing, the streaming service might see 3–4% of its domestic customers cancel, or 2–3% of the worldwide streaming subscription base of 80 million.
The good news for Netflix is that, according to the survey, 55% of subscribers would not cancel the service until it reaches $15/month, and 15% wouldn’t cancel until it surpassed $20/month. The price of Netflix’s streaming service currently tops out at $11.99/month for a plan offering four simultaneous streams and access to 4k Ultra HD titles.
“This would appear to leave Netflix with significant room for domestic price increases in the coming 3–5 years,” wrote Piper Jaffrey analyst Michael Olson.
In October 2015, Netflix announced that it was raising the price of its standard streaming service from $8.99/month to $9.99/month for new customers in U.S., Canada and Latin America, but the monthly subscription rate for preexisting subscribers who signed up at $8.99 price would remain unchanged for the next 12 months — a period which will expire in October 2016.
“The bigger impact on [Netflix] shares from ungrandfathering may simply be the cloud that it casts over the stock as investors remain concerned about potential negative impact to churn in the coming months,” wrote Olson.
Olson also wrote that he doesn’t anticipate Netflix increasing U.S. prices in the next two years, and his long-term analysis suggests that the streaming service could have more than 140 million subscribers worldwide by 2020.