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Sample Business Plan Paper on Netflix Price Increase

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Sample Business Plan Paper on Netflix Price Increase

In an article concerning a letter written to its shareholders, Netflix has an intention of increasing its prices for its products and services. The article is relevant to our chapter as it helps us in expanding our understanding on the use of technology, as Netflix is a technological company that relies on the use of technology for its service provision and expansion.

According to some analysts, Netflix has to increase its prices in order to cover its expansion and higher content costs. These costs can be classified as marginal costs as they are additional costs accrued from expansion of services by Netflix. Due to the intention of increasing the prices by Netflix, the company is hoping to offer three different options to its new members in an attempt to meet the preferences of the members. In addition, Netflix emphasizes that the new prices would not instantly impact the existing members, but the effects of the increased prices would be felt by the existing members some time later. Netflix also argues that the movement to the new broader options for its members is not aimed at raising its revenue at the short run, but is aimed at extension of better services to the new and existing members (Stenovec, 2015).

For about one year, Netflix has been offering different pricing options to its members in the U.S. some of these options include the viewing of four streams for an addition of $11.99 per month. Another plan includes allowing three people to watch different streams on the same account for a monthly charge of $9.99. According to Netflix, all these options are aimed at improving its services to its members (Stenovec, 2015).

Netflix has a good plan for its members, and its options will best serve the members. Companies aim at making profits and hence, Netflix should take into consideration its marginal costs of expansion of its services to avoid making losses. It can achieve this through outsourcing, to ensure that the options are both beneficial to the members and also to itself.


Stenovec, T. (2015). The Days Of $7.99 Netflix May Soon Be Over. Huff Post TECH, p. 1.


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