Netflix is considering raising prices after the ongoing actors’ strike ends, but it could convince people to finally pull the plug on the streaming service. A new report from CivicScience suggests the platform could see a significant loss of subscribers following such a move.
CivicScience, an opinion research group, surveyed current Netflix users and those likely to subscribe. The report shows that 39% on the ad-free tier would consider canceling their account if the cost increases and 31% would consider subscribing to Netflix Standard with Ads. Of those considering signing up, 29% would still land on the ad-free plan.
When looking just at the ad-free plan accounts, 35% said they would cancel entirely, while 48% said they’d continue their current subscription, and 17% would move to an ad-supported plan.
The results illustrate how cost is a significant factor for many households when deciding which streaming services to keep and which to cut, particularly with rising prices everywhere else. As a result, people are scaling back the number of paid accounts they use. Households with four or more subscriptions have been declining over this year. CivicScience notes that 33% of consumers plan to or have reduced their streaming bills, a 5% rise since January.
“Similar to prior years in which they instituted a price increase, [Netflix] would not do so without careful analysis in order to limit church,” Wedbush Securities Analyst Alicia Reese told IndieWire. “If Netflix’s research shows that they will lose one-third of their premium subscribers on a $1 monthly price increase, they would be unlikely to implement the price increase.”
Another factor influencing consumers is available content. More people are struggling to find films and shows to watch, spurred on by the strikes in Hollywood. CivicScience found 29% of streamers aren’t interested in the content available, up from 24% since April. More than a third of those contemplating cancellation said a price hike would push them over the edge as they are running out of content to watch. Less than 25% of members on the ad-free plan said they would continue with their current membership if the cost increased.
“Our pricing philosophy has not changed, which is we have to add more value to the consumer,” said Netflix co-CEO Ted Sarandos during the Bloomberg Screentime event on October 12, according to IndieWire. “And then we come back and ask them to pay a little bit more for it if they agree.”
Netflix costs $9.99 for a Basic plan, $15.49 for Standard Ad-Free, or $6.99 with ads. The streamer hasn’t released details on what each plan will cost following a price hike.