You say you'll cancel Netflix if the price goes up, but you're actually lying to yourself
In May of 2014, Netflix raised the price of its standard streaming plan, for new subscribers, to $9.99 per month. Existing subscribers were grandfathered into the plan at $7.99 per month for the two-stream, "HD" quality plan.
That is set to change this May, with all grandfathered customers being moved up to the $9.99 plan. Analysts at UBS have estimated that this will affect about 17 million US subscribers (37%).
And people are grumbling.
In a survey conducted by UBS, 41% of respondents said they would accept no price increase for Netflix. They would, allegedly, not be willing to pay a single extra cent. This seems like horrible news for Netflix, which presumably is about to get gutted by insane subscriber losses in the coming months.
Except that it actually won't. Why? Because when people estimate how much more they would be willing to pay for their entertainment service, they lie - maybe even to themselves.
UBS analysts spelled it out clearly in a report published Monday:
So how many people will cancel?
UBS estimates roughly 3%-4% of affected subscribers will cancel. This will drop US net additions to 450,000 from 903,000 in the same quarter of 2015. But it's hardly the doom and gloom the survey results suggest.
One reason why Netflix users won't cancel: it's still a great value per hour spent watching. Netflix costs 9 cents per hour of viewing, while a typical pay TV package costs 30 cents per hour, according to UBS.