In the age of Peak TV, cord cutting, and too many media options, many pop culture–loving Americans have had to make some budgetary decisions. Gone are the days where everything you might want to watch is available in one bundled cable package—but when it comes to choosing which service to keep, Netflix often emerges as the best bang-for-your-buck option. There’s a new TV series to watch every weekend (sometimes more than one), and with plans ranging from $7.99-$11.99, it costs less per month than a single night out at the movies. But now that Netflix has hooked an audience on its never-ending supply of original content, the streaming service is curious to know how much you’ll really pay to stay plugged in.
A rather alarmist article from The Australian indicates that prices are going up down under. The paper reported, and Netflix confirmed, that the streaming service has been running tests in Australia that increased the basic service from $8.99 to $9.99 a month, the standard service from $11.99 to $13.99 a month and the premium service from $14.99 to $17.99 a month. What The Australian got wrong, according to an emailed statement from Netflix, was identifying this price hike as a new “weekend surging” model. “Reports that we are testing ‘weekend-only’ pricing are inaccurate and entirely false . . . This testing varies in length and time and the fact that some members saw this test on a weekend is completely unrelated.” So no, neither you nor any Australian you know will have to pay more for enrolling in a Netflix plan on the weekend.
But Netflix admitted it is exploring charging more for its goods and services with this Australian test. The company, no doubt, wants to avoid a catastrophe similar to the one in 2011, when, after C.E.O. Reed Hastings announced the short-lived DVD-only service Qwikster and a potential 60 percent price hike for some customers, users rioted and cancelled their subscriptions— causing Netflix stock to plummet. Back then, the company overplayed its hand—at the time, local video stores hadn’t yet been driven out of business, and the addictive likes of Stranger Things, Orange Is the New Black, Jessica Jones, and more were just a glimmer in TV-lovers eyes. Netflix’s first original series, House of Cards, didn’t launch until 2013.
What a difference a few years make. In 2015, after Netflix had made itself even more valuable to customers thanks to the rise of binge-watching and the 2013 demise of Blockbuster, the company attempted again to raise its prices. This time, the hike was much gentler—a mere dollar increase in most cases rolled out gradually—and Netflix users took the change docilely, (for the most part). That’s what happens to frogs in a pot of hot water when you turn up the temperature slowly.
So in Australia, Netflix is doing what it has done many times before in other countries: seeing what the market will bear. Fortune speculates that the company may be exploring a significant price surge in Australia specifically (and, Netflix stresses, this is exclusively an Australian test) because of a “recent decision to extend the federal government’s 10 percent goods and services tax to cover ‘intangible supplies,’ including digital content and streaming services like Netflix. Nicknamed the ‘Netflix Tax,’ the extended tax will start affecting companies like Netflix when it goes into effect on July 1.”
Having assured its customers that weekend surge pricing is not a thing, Netflix further clarified in an emailed statement to Fortune: “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.” May not—but after a decade of rock-bottom pricing on streaming content and establishing a firm stranglehold on pop culture (not to mention an expansion into the world of filmmaking), Netflix has no reason not to make you pay.
This post was updated to include some more specific language from Netflix on the nature of this test.
