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1 minute read
Netflix is cheap -- very cheap -- and it has seemed clear for a long time that Netflix has room for quite substantial price increases. Now the streaming-service has been "caught" experimenting with higher prices for new customers, and as this lead to newspapers speculating about Netflix implementing "weekend surge pricing", which a spokesperson denied:
“We continuously test new things at Netflix and these tests typically vary in length of time. In this case, we are testing slightly different price points to better understand how consumers value Netflix. Not everyone will see this test and we may not ever offer it generally. These tests vary in length, and they are NOT weekend only.”
Regardless of Netflix' intentions, the move is very interesting as firms such as Netflix typically focus entirely on market share rather than profit. And now is a time where Hulu and Amazon are aggressively trying to win market share, so why on earth would now be the time to increase prices?
Truth is, it's not -- Netflix should have increased prices a long time ago, but better late than never. What the streaming-service probably now realized, which Amazon realized a long time ago, is that a company NEEDS profits to compete with the big boys. You can't take on Amazon, or any other giants with a new funding round -- you need profits to reinvest in activities and features that create value.
