Netflix Rate Increase, Are we next?

Netflix have increased their subscription rates for their United States users and many of them are not happy at all with these changes. These news pushed me to investigate what was behind these modifications. Sure, this subject interests me but what I really want to know is if the Canadian users are next in line?

For now, nothing has been announced for Netflix Canada users, as the $7.99 a month subscription rate hasn’t changed since last year’s launch. Logically nothing should change because the rate modifications affecting United States users apparently come from a rumoured miscalculation of their services popularity. Underestimating the subscribers interest for DVD mail delivery, and overestimating their clientele’s interest for their streaming-only subscription plan. More clearly, it is more expensive for Netflix to run the DVD mail delivery service than it is to run the streaming-only service, hence the price adjustment.

The main reason why Canadian users shouldn’t see such a big jump in subscription rates is the fact that in Canada, the streaming-only subscription is the sole service available. Meaning that Netflix won’t need to readjust their rates in order to better reflect their expenses. Also, there is obviously no reason to push customers to opt for the streaming-only option instead of the DVD mail delivery as the latter isn’t available in Canada.

The only reason which could push Netflix to increase their Canadian rates would be to acquire more TV shows, movies and documentaries rights. The big distributors are becoming more and more demanding in terms of how much they ask for these rights. In other words, as the library will grow, if the amount of subscribers doesn’t follow, the subscription rates may have to be adjusted.