A Netflix spokesperson has confirmed that the company is not looking to implement weekend surge-pricing for its subscriptions in Australia.
Recently, we’ve seen several reports over the last few days about Netflix trialling such price increases . The tactic of charging users more for a service at times of heightened demand (commonly referred to as 'surge pricing') is a questionable practice at the best of times; thankfully it looks like that’s not actually what’s happening here.
We contacted Netflix for a response and were given the official statement: “We continuously test new things at Netflix and these tests typically vary in length of time. In this case, we are testing slightly different price points to better understand how consumers value Netflix. Not everyone will see this test and we may not ever offer it generally.”
When we asked for a further clarification about whether the trial was to test a different price point generally or if it was to test higher prices at weekends the response we got back was pretty conclusive.
“These tests vary in length, and they are NOT weekend only” a Netflix spokesperson confirmed to TechRadar.
What's it worth to you?
Surge pricing works well for services like Uber, where an individual journey can cost you more during a busy period when there is a shortage of taxis. It leaves a sour taste in the mouth, but it’s something you can get over once your trip has ended. A subscription service is a different matter.
The Australian reported that the subscription charge for basic users went up from $8.99 to $9.99, standard users saw a greater increase going from $11.99 to $13.99, and Premium users saw the biggest increase from $14.99 to $17.99.
Obviously, if there was a surge pricing model, it would mean that a user signing up for the service on a Sunday would end up month-by-month paying more than if they had signed up 24 hours later. Considering that Netflix subscriptions can be cancelled at any time, it wouldn’t make sense to implement this as a practice as users could easily circumnavigate it.
In this instance Netflix appears to be testing the waters before announcing an official price increase to see what people are willing to accept as a new price. Worth noting is that the Netflix spokesperson confirmed that this test is only being run in Australia.
Also, if you are worried about the test being unfair on the specific users that have ended up paying more; Netflix confirmed: "people who were part of the test get the normal price at the end of the test". If we get any further information on what these tests are for, we'll let you know.
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Andrew London is a writer at Velocity Partners. Prior to Velocity Partners, he was a staff writer at Future plc.