Netflix is About to Piss Off a Whole Lot of Customers — Get Ready For a Big Change


The news: Netflix is contemplating a price hike for its users in the United States. Coming off of a strong 2013, the video streaming service is considering upping its price beyond the current $7.99.

But don't panic yet. The price increases would likely come in the way of expanding services. Reed Hastings, CEO of Netflix, said, "It's not clear that one price fits all" for Netflix's streaming services. The idea would be to implement a tiered offering of streaming packages that consumers could choose from. The most basic would likely remain at $7.99, with the option for expanded service at an increased price.

Nothing is set in stone, though. In a letter to shareholders last week, Netflix said that it is in "no rush to implement such new member plans and is still researching the best way to proceed," and that even if the company does "make pricing changes for new members, existing members would get generous grandfathering of their existing plans and prices."

It is not even clear that Netflix is going to move forward with this. Remember the last time Netflix tried implementing a major overhaul of its services? Qwikster was around barely for a few weeks before overwhelming backlash put the kibosh on it. Changes to Netflix's offerings are easier said than done.

Netflix users are a particularly organized and active bunch. When Netflix wants to rally its troops in the company's favor, this comes in handy. But when the attention turns against Netflix itself, this can make service changes particularly difficult to enact. Netflix users don't like change, especially when it's a price increase (I mean, who does?)

But there are clues that point to some sort of price change on the horizon. Netflix has already phased in an $11.99 plan for users to stream to four devices at once. And if Netflix wants to keep up with increasing competition, it may need to start making serious moves. In the same shareholder letter, Hastings pointed to growth from Hulu, Amazon and iTunes that makes it necessary for Netflix to adjust its offerings.

Whatever Netflix decides to do, the company seems committed to ensuring that current customers retain their current plans and prices, at least for the time being. So while price increases might be coming eventually, they're not imminent.