Many of us conventional consumers are used to certain constants in our lives. We get up, we go to work, and when we get home, Netflix is waiting for us. The unjudging glow of an episode of The Office for the 15th time is a staple in the twilight hours for many a weary weekend warrior. But then, like with the unexpected death of a beloved character in a favorite series, the illusion suddenly shatters. Netflix has to go and raise prices. Again.
This Isn’t the First Time
We’ve seen this movie before. Larger news outlets and edgy online publications alike try to put an elusive original spin on the inevitable. They’ll either laud the streaming savant as a juggernaut of creative content, or they’ll warn of doom and gloom for the company and its subscribers. Either way, the real story quietly continues the same way every time. Netflix is still raising prices, and just like with the series that killed off our favorite character, we’re still watching.
Follow the Numbers
Before I send the Hulu heroes into histrionics, this is not another pat on the back for the big guy. This is a business lesson in knowledge and trust when it comes to a customer base. Put your personal streaming preferences aside for a moment, and consider the facts. Despite protests about every previous price hike, Netflix managed to inflate its stock with the moves while continuing to add tens of millions of subscribers year over year. This, the largest price increase since the company’s humble beginnings, was greeted by a 6.5% bump on the market the next day. While the share price has momentarily returned to the mean, it still seems to be trending upward, and subscribers are sure to as well.
Commitment to Customers
So, what? That’s not understanding and trust. The price increase is just a money grab, right? Well, it’s a little more involved than all that. The reason this model works and keeps working is that Netflix has a special rapport with its subscribers that most any business envies. The voice of the customer has spoken, and bigger, better content is what we all crave. Netflix has listened and is on an absolute warpath when it comes to cranking out original content. Spending $12 billion and producing roughly 1,500 hours of the stuff in 2018 sends a pretty clear message that the folks at Netflix are doing their darndest to give us what we want.
Customers historically accept a price increase when they’re excited about a brand as a whole. Higher prices should be like a promise that quality will improve, but a customer base will only accept the terms if they trust that your business will actually make that happen. It’s important to monitor how your customers are feeling about your brand and your mission while being transparent and acting on your goals. Netflix has committed to doing that, and, even though some subscribers take to Twitter in protest for a brief moment, it seems that most accept the service is moving along with the price tag. Onwards and upwards.