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Netflix Needs to Earn Its Price Hike

How much is too much to pay for the world’s most popular streaming service?

Netflix/Ringer illustration

Check your credit card statements, folks. If you missed the news, Netflix is raising the price of its standard $10-per-month plan to $11 for existing subscribers come November (new subscribers must pay the higher fee immediately). A Netflix price increase used to be potent grist for the internet’s outrage machine—the company’s 2011 attempt to turn its DVD-by-mail and streaming services into separate businesses (which I am retroactively christening The Qwikster Affair) sent its stock tanking and led nearly a million customers to cancel their subscriptions. But another price hike on the streaming side from $8 to $9 in 2014 produced less digital vitriol, partially because existing subscribers were warned two years in advance of the increase. The jump from $9 to $10 in 2015 was accompanied by a one-year grace period. This time around, though, customers received only about a month of notice.

Netflix, long thought of as a customer-centric business, is taking on some of the powerful swagger of the Hollywood and cable industries it aims to disrupt. Content shuffles onto and off of the service with only a few weeks’ warning. Prices keep creeping higher. And the original programming that is quickly becoming the platform’s main draw varies wildly in quality. It’s time to start asking the tough questions: Is Netflix really still worth it at $11 per month? Ringer staffers and Netflix users Victor Luckerson, Alyssa Bereznak, Molly McHugh, Kate Knibbs, and Alison Herman debate the merits of a service that’s changed a lot since we all started subscribing for DVDs-by-mail so many moons ago.

—Victor Luckerson

Victor Luckerson: The first thing I’m curious about is whether a Netflix price hike has ever convinced anyone here to cancel their Netflix subscription, or at least second-guess it? Or are there other reasons that make you question your Netflix loyalty, like the loss of a cherished sitcom or a disappointing original show?

Molly McHugh: I’ve never thought about canceling my Netflix subscription until now. I’m watching The Office reruns, and that’s all I’m using it for. Honestly, the biggest problem with canceling it would be that I have a mooch-friendly thing going with my friend.

Alison Herman: I think the question isn’t really, “Is Netflix still worth it at this current price?” It’s only $12 more a year, and given how many recurring subscriptions I discover are still draining my bank account despite months of disuse, $12 isn’t enough to get anyone to pull the plug. Instead, I’d ask, “Will Netflix always be worth this new price?”

Kate Knibbs: I would probably stop paying for Netflix if its original content started sucking, because I think the television rerun catalogs of Hulu and Amazon are catching up.

Herman: It’s in the nature of licensing agreements for shows to expire and turn over to new services, as fans of 30 Rock (and Hulu stakeholders) just learned. In the long run, as there are more and more services from more and more providers, Netflix’s cache of outside shows is bound to diminish. So now the race is on to compensate for that in original series and films people are willing to pay the same price, if not more, for.

McHugh: The fact that 30 Rock is gone is almost reason enough for me, honestly. That’s my go-to background TV show.

Herman: SAME. And I think its exit from Netflix is a huge symbolic shift.

Luckerson: A big appeal of Netflix is that it can serve as “background TV” as traditional linear television does. But when you get rid of those old comforting bingeable shows, that appeal diminishes.

Herman: Netflix is going to have to gradually shift its brand from “we collect all your favorite shows” to “we make all your favorite shows.” As skeptical as I may be of the Stranger Things phenomenon, they seem to be doing OK at that so far! But things can change.

McHugh: The OA was bad.

Herman: THANK YOU, MOLLY.

Knibbs: (Mindhunter is bad.)

Herman: THANK YOU, KNIBBS. I didn’t expect this chat to become a validation of my TV opinions, but I appreciate that that’s what it is now.

McHugh: What original Netflix content do we like then?

Alyssa Bereznak: I think it’s a matter of making shows that make you feel a certain way! Like, I love Stranger Things, but I’m not going to put that on in the background as I wash my dishes. That job goes to Friends.

Herman: BoJack Horseman is my favorite, but in terms of phenomena that drive subscriptions, it’s done well with nostalgia appeals (Fuller House, Stranger Things) and true crime.

Knibbs: I enjoy some of their original movies. I liked First They Killed My Father and Okja.

Oh yes, and BoJack!

Luckerson: Every year Netflix produces one new show that really surprises me with how great it is. This year it was GLOW. Somehow that allows me to rationalize spending ~$120 per year on it.

Knibbs: Just thinking through the original content, there’s obviously a lot of crap, but there’s enough quality to make it worth it for me.

Herman: One of the more surreal parts of Netflix is that they profit off of both the thing (i.e., Making a Murderer) and the parody of the thing (i.e., American Vandal). It’s both strange and a telling indication of how they want their originals to be all things to all people. (Same deal with Fuller House and BoJack, TBH.)

Knibbs: I’m curious, would you pay for an Amazon streaming service if it wasn’t included in Prime? I’m still not convinced that anyone anywhere in the world watches Mozart in the Jungle.

McHugh: I doubt it.

Bereznak: No way.

Luckerson: I don’t have Prime and get the streaming one month per year to watch The Americans so … sometimes?

Herman: Probably not, and if I’m being honest, I think that explains why Amazon [Studios] hasn’t yielded the results with its Prime [offerings] that a company with literally unlimited money should. It’ll always be a sideshow to them—and the speculative, unpredictable nature of entertainment doesn’t seem to mesh well with its intensely numbers-focused corporate culture.

Prime’s struggles lately have been, uh, well-publicized. That WSJ exposé!

Luckerson: Right, Alison, I think I remember you saying one time that the fact that no one can even define what a “prestige” Amazon show is is part of the service’s problem.

Herman: Yep! They came out of the gate strong with Transparent but haven’t followed it up with something equally compelling (besides Gael Garcia Bernal’s weird man-braid, obvs).

Luckerson: They also lack an entertainment chief at the moment due to the suspension of Roy Price, so I don’t think they’re going to arrive at any kind of programmatic clarity anytime soon.

Herman: I am excited for the Amy Sherman-Palladino Joan Rivers thing, though. I would pay $99/year just for a prestige drama about Jewish female stand-up comedians. But that’s just me.

Bereznak: I think you just invented the next hot startup, Alison.

McHugh: I mean, I would buy shows on Amazon individually. ... So are we just recreating the same problems we had with cable? Are we just spreading out what we’d pay for cable over like 10 different services and doing more work and paying as much in the process?

Herman: I totally agree with what you said about the cable problem, Molly. The internet is inventing the problem that cable already solved. And anecdotally, people tend to rely on Netflix as this catch-all crutch that collects everything they need in one place. Their success—and people’s willingness to pay—hinges on whether they can live up to that. The first question I get about ANY show I recommend is: “It’s on Netflix, right?”

Luckerson: Disney’s ending its contract with Netflix to launch a competitor, right? I still need to watch Finding Dory on there.

Herman: Yes, watch Moana before it’s too late! Confusingly, Disney’s service will only be for their movies, because they own ABC, which partially owns Hulu.

Luckerson: We haven’t talked much about Hulu. This month it’s dropping its price to $5.99 as a special offer and claiming old Netflix staples like 30 Rock, Futurama, and How I Met Your Mother. Is there a scenario where Hulu overtakes Netflix as the market leader?

Herman: Well, they already beat it to the Outstanding Drama Series Emmy!

Knibbs: Hulu also has Law and Order: SVU.

Bereznak: Also, Hulu has The Bachelor.

Luckerson: Hulu’s bench is shockingly deep, TBH. I’m partial to Everybody Hates Chris.

Herman: Todd VanDerWerff of Vox wrote a great piece about how Hulu is aiming to replace Netflix as Chief Aggregator, basically. Netflix’s long-term goal is that they’ll have so much original content they won’t need outside help; Hulu’s is certainly not to give up on originals, but augment them with the comfort TV we used to assume was part of the Netflix experience.

Honestly, I think it’s smart!

Bereznak: I have a theory that whichever subscription service amasses rights to the most inoffensive, easy-to-watch-in-the-background reality TV and sitcoms will reign supreme.

The moment they got Seinfeld, they won in my book.

Herman: But Netflix still has Friends ...

Knibbs: As Friends goes, so go the Streaming Wars.

Luckerson: A year later, I still want to know: WHERE THE HELL IS FRESH PRINCE?

Herman: (Don’t forget that Girlfriends is on … CW Seed.)

McHugh: WTF is CW Seed?

Herman: Good question, Molly! My favorite part of Peak TV is how there are now whole NETWORKS people haven’t heard of, not just shows. Crackle! Audience! Go90!

Knibbs: So CW Seed is the Mozart in the Jungle of streaming services.

Bereznak: What deformities hath the streaming wars wrought?

Herman: Too many shows for one poor, overwhelmed critic to ever watch.

Luckerson: Getting back to Netflix, why do y’all think so many people stick with this company through so many iterations? This is a DVD-by-mail service that became a digital locker for old shows that’s morphing into a weird amalgamation of broadcast, animated, and prestige-TV imitators. In its most recent quarter, Netflix added 5.3 million new subscribers, beating analysts’ estimates. Why is the Netflix brand continuing to grow and reach new people through all these transformations?

Herman: The simple answer is that people want an easy way to watch their stories, and $10.99 is still a hell of a lot cheaper than cable.

McHugh: It was the first. We’ve been there so long. We’ve built these accounts based on our likes and streams, etc., etc., etc.—it taught us how to stream! And yeah there’s the fear you cut one of the big ones out and they get something good and then you’re out of luck.

Bereznak: People will always be bored and broke on Friday night. Me and my family used to go to Blockbuster every Friday and rent two movies. I’m pretty sure that ritual has just moved online for a lot of people, and Netflix is the go-to.

Herman: And now that they have a new movie or show EVERY SINGLE FRIDAY, Netflix is now at the point where they’re outcompeting themselves. I didn’t have time for Mindhunter AND The Meyerowitz Stories this weekend!

Knibbs: Even with the price hike, it’s still crazy affordable. I would pay probably three times as much.

Bereznak: Shh, Kate, they’ll hear you.