Netflix: would you be happy to pay more for the streaming service?

Patrick Collinson
Stranger Things: the Netflix show was among Google’s most searched-for words in 2017. Photograph: Netflix/AP

Usually this column rails against rip-offs, overcharging and general shystering by business. Dare we suggest there’s a global American tech brand that is, well, undercharging us?

The staple office banter in the morning used to be what was on BBC or ITV last night. Now it’s what’s on Netflix. “You’ve got to watch Grandma. It’s a really funny, sparky, indie comedy,” a colleague told me on Monday morning. “I’m watching Altered Carbon at the moment. I know it’s a bit Blade Runner, but it’s really good,” chipped in another. “I got halfway through The Cloverfield Paradox last night. Didn’t really get it,” said another. It has become the thing to name a great show on Netflix other colleagues may have missed (my tip: you’ve got to watch Rita).

Are these conversations repeated up and down the country? Almost certainly. A report by Google on the most searched-for words in 2017 reveals that three of the top five TV shows searched for globally were from Netflix (Stranger Things, 13 Reasons Why and Iron Fist). Even when you set Google just to show UK results, 13 Reasons Why comes top, edging I’m a Celebrity … Get Me Out Of Here! into second place.

The fact that Netflix is outgunning traditional broadcasters comes despite the fact that it’s still in a minority of UK households, though probably not for long. Video-on-demand is now in 9.5m UK homes, and Netflix is by far the biggest player, though Amazon is building numbers. Interestingly, Scotland has the highest Netflix penetration in the UK, according to the BARB report - which also tells us that 16% of UK homes now have a telly that’s at least 50 inches wide.

But it was one colleague’s comment that’s the reason why this is in the Money column: “I’m watching Netflix so much now I can’t believe what good value it is. It’s only £7.99 a month. They could put it up to £15 a month and I’d still happily pay.” A weird bidding war erupted. “I’d pay £20,” was the next offer. “I’d pay £25. My daughters use it all the time.” And so it went on.

Globally, Netflix now has 110 million customers, giving it £8bn revenue a year, compared with the BBC’s £3.7bn licence fee income. Its marketing spend alone in 2018 will be $2bn – compared with the £1bn that ITV has to spend on all its programmes.

Of course, Netflix may put up its prices once it establishes market dominance. My colleagues may not sound so chipper about it then. And don’t read this the wrong way: no one wants Netflix to charge more. But is it that rare thing: a product for which most of its customers would be happy to pay more?