Netflix Raises Rates to Less Outcry This Time

Last time Netflix raised their rates they definitely swung for the fences, doubling their fee in the face of multiple streams of service. Their customers answered with a resounding “meh” … followed by canceling their subscriptions. The company relented, dropping their rates and allowing mail order customers to keep streaming and vice versa.

Now, a few years after that particular PR disaster, Netflix is once again raising its rates. This time by only a buck a month. Customers are likely to yawn and pay up. After all, since the debacle, Netflix has not only drastically expanded its library, it has also added critically acclaimed original programming such as fan favorites Daredevil and Orange is the New Black.

Further softening the blow, Netflix is offering some existing customers a grace period before their rates go up. This concession argues that Netflix learned something from its previous mistake. And that learning process provides an important public relations messages for tech companies and anyone else who wants to get more customers … and keep the ones they have.
First, Netflix admitted their gambit was a bad move. The new name? Gone. The much higher price? Gone. The same programming? Still there. Then the company added even more programming, giving customers more for the money they were willing to spend on less.
The icing on the cake, though, is what really put Netflix over the top, not only cementing their fan base but also changing the game in TV across the board.

Netflix’s unmitigated success with its original programming has motivated competitors such as Amazon to try their hand at original programming. And motivated premium cable networks such as HBO to explore a work independent of the cable lineup.
As Netflix continues to find success, Amazon continues to find its place in the market and HBO’s experiment entices other pay channels like Showtime to make the leap.

Consumer appetites are changing, moving alongside these new opportunities in droves. People love being able to choose what they watch and watch what they choose, and they don’t mind paying a bit for the privilege. Cable better take notice.

5WPR CEO Ronn Torossian is a leading PR Executive based in NYC.