Netflix Price Hike Could Lead to Massive Subscriber Drop-Off

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Thinking about canceling your Netflix plan when the streaming service raises your monthly fees to $9.99 this year? According to Variety, you're not alone.

Using a 2 percent churn rate for the millions of customers facing a $2 hike and a 1 percent rate for those facing a $1 hike, Nomura Securities analyst Anthony DiClemente estimates that as many as 480,000 of Netflix's US-based customers could opt to cancel their subscriptions, rather than digging a little deeper into their pockets each month. Still, the price increase won't be all bad for the company: Variety reports that Netflix did predict a "modestly increased churn" as a result of the hike, and that the company also expects to see an extra $1 billion in 2017 because of it.

HD customers who registered accounts after the company's May 2014 price hike have already been paying the new $9.99 standard, while others found themselves "grandfathered in" under the old fee, about $1 to $2 less.

For those who choose to stay with Netflix following the hike, the $9.99 plan is not the only option. Customers were presented with alternatives that included downgrading to a Basic Plan for $7.99 per month, or upgrading to the Ultra HD Plan for $11.99 per month.

[h/t Variety]

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