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Gauging Consumer Reaction to Netflix's New Pricing Strategy - A Primary Research Perspective Product Image

Gauging Consumer Reaction to Netflix's New Pricing Strategy - A Primary Research Perspective

  • ID: 1955579
  • October 2011
  • Region: Global
  • 22 Pages
  • The Diffusion Group

Since Netflix first announced its new pricing scheme on July 13, 2011, there has been vast speculation about how Netflix subscribers—in particular dual-service users—would respond to this aggressive move. TDG fielded a targeted study of 500 dual-service Netflix subscribers—that is, those that used both the DVD-by-mail and streaming services—as to their perceptions and likely “next steps” given the price increase they now face.

This brief report reveals the consumer reaction and possible ramifications for Netflix in the coming months.

Key Findings

1 Introduction: Netflix Graduates to the Real World—and It Stinks!
1.1 The Context
1.2 The New Pricing Scheme
1.3 Enough Already—Let the Consumer Speak!

2 Netflix Use among Dual-Service Subscribers
2.1 Netflix Tenure
2.2 Monthly Fees
2.3 Average Disc Rentals among Dual-Service Users
2.4 Tenure of Streaming Use
2.5 Average Weekly Streaming Use
2.6 Impact of Netflix Streaming on Regular TV Viewing Habits

3 Consumer Reactions and =Likely Actions‘ to the New Netflix Pricing Scheme
3.1 General Perceptions of New Pricing Scheme among Dual-Service Subscribers
3.2 Evaluating Likely Reaction
3.2.1 Proclivity to Cancel DVD-by-Mail and Use Streaming Only
3.2.2 Proclivity to Cancel Streaming and Use DVD-by-Mail Only
3.2.3 Proclivity to Cancel Netflix Service Altogether

4 Likely Netflix Service Replacements among Would-Be Cancellers

5 TDG‘s Expectations for Impact of Netflix Pricing Shift

6 Winners and Losers
Copyright Notice
Research Disclaimer

List of Exhibits

Exhibit 1 – Service Tenure among Dual-Service Netflix Subscribers
Exhibit 2 – Monthly Dual-Service Netflix Subscriber Fees
Exhibit 3 – Average Monthly Disc Rentals
Exhibit 4 – Average Netflix Discs Viewed per Month by Age
Exhibit 5 – Presence of Children in the Home and Proclivity to Cancel DVD-by-Mail Only
Exhibit 6 – Tenure of Streaming Use
Exhibit 7 – Average Weekly Streaming Use
Exhibit 8 – Average Hours/Week Streaming Netflix Video by Age
Exhibit 9 – Impact of Netflix Streaming on Regular TV Viewing Habits
Exhibit 10 – General Perception of New Pricing Scheme
Exhibit 11 – Relationship between Age and Perception of New Netflix Pricing Scheme
Exhibit 12 – Proclivity to Cancel DVD-by-Mail and Use Streaming Only
Exhibit 13 – Age and Likelihood of Cancelling DVD-by-Mail but Keeping Streaming Service
Exhibit 14 – Presence of Children in the Home and Proclivity to Cancel DVD-by-Mail Only
Exhibit 15 – Proclivity to Cancel Stream and Go with DVD-by-Mail Only
Exhibit 16 – Age and Likelihood of Cancelling Streaming but Keeping DVD-by-Mail
Exhibit 17 – Proclivity to Cancel All Netflix Services
Exhibit 18 – Age and Likelihood of Cancelling Netflix Service Altogether
Exhibit 19 – Presence of Children in the Home and Proclivity to Cancel Netflix Altogether
Exhibit 20 – Primary Choice for Replacing Netflix Services
Exhibit 21 – TDG‘s Expectations for Service Adjustments and Cancellations

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