FILE – In this July 20, 2010 file photo, a person uses Netflix in Palo Alto, Calif. Netflix on Tuesday, Aug. 4, 2015 said it will expand into Japan beginning Sept. 2, 2015 to give the Internet video service its first presence in Asia. (AP Photo/Paul Sakuma, File)
By John Christen
The beloved streaming service Netflix announced on Oct. 8, 2015 that its standard streaming plan price would increase from $8.99 to $9.99, a seemingly inconsequential fee to those whose parents (or friend’s parents) still pay for their right to stream. However, this change was implemented to “continue adding more TV shows and movies including many Netflix original titles,” Netflix claimed in a statement released with the price augmentation announcement. This means that Netflix subscribers will be blessed with better Netflix originals, but also that the streaming service is stepping up its efforts to list current popular films and TV shows. Licensing agreements are expensive — besides a desire to expand the company’s profit margin, Netflix is trying to give its customers a more diverse set of viewing options.
According to data on Google Finance, Netflix’s shares increased in price about 6 percent when the price adjustment was announced on Oct. 8. This is a clear demonstration of investors’ faith in the monstrous success of a company like Netflix, whose customer base continues to grow steadily.
The one-dollar increase will only immediately affect new customers in the U.S., Canada and Latin America. Netflix’s other markets around the world will not see the adjustment until next year. Fortunately, for current subscribers in the aforementioned areas that do “not already [benefit] from a current price guarantee,” prices will remain the same for one more year. This strategy should prevent users from immediately dropping their memberships due to the looming price increase, since the marginal price change will occur after the initial concern that the announcement raised.
Streaming services like Netflix have surged dramatically in popularity over the course of the last ten years. Amazingly, per appleinsider.com, Netflix “revealed that in 2015, its streaming video service accounted for 37 percent of peak download Internet traffic in North America.” That number is astronomical, taking into consideration the terabytes of information that are transferred, streamed, uploaded and downloaded via the internet every second. (Even Fordham University’s lackluster internet service’s bandwidth is burdened with the data-heavy requests of Netflix user’s devices on campus. This has posed such an issue that in many residence halls on campus, residents are discouraged from using Netflix, and other streaming services, to improve the WiFi reliability via reminders posted on dorm bulletin boards.)
What makes Netflix so popular at Fordham and around the world? This question might only be posed by someone who does not subscribe to or use Netflix, a person who does not understand the often time-consuming, but pleasing effects of binge-watching a television series on the internet video provider. Netflix, along with its video-streaming competitors such as Hulu, Amazon Prime, YouTube and iTunes, have given television and movie lovers a new, incredibly convenient way to watch what they want to watch without interruption. Yet Netflix remains on top due to its selection, lack of commercials, incredible reliability and availability. By raising its base price by one dollar, Netflix is collecting the financial resources it needs to remain not only the most dominant internet streaming service, but also the most popular way in which the internet is used today.
