May I suggest that the next thing you do after reading this newsletter is check your most recent credit card statements?
Your mission: Scan your monthly subscriptions and do a quick value audit. The recent price hike from Netflix NFLX-Q is a reminder that subscription costs are a one-way street. They only go higher, which means you need to periodically review them.
Netflix is practically a household utility these days, so there’s been a lot of coverage of the price increase. The standard plan with ads jumps by $2 to $7.99, while the standard plan sans ads goes up $2.50 to $18.99 and the premium plan goes up $3 to $23.99.
Inflation for December came in at a modest 1.8 per cent on a year-over-year basis. The cost increase on Netflix’s standard plan without ads works out to 15 per cent.
Is Netflix worth it? I say yes, for three months or so at a time. As noted in this newsletter, we cancelled Netflix last May after 13 years. We re-upped in the fall, and then cancelled again a week or so ago. Basically, we watched everything we wanted to.
The business model for subscription services is to hook customers with a nifty product priced in a way that makes people ask, why not? From there, you steadily increase prices as permitted by demand. Netflix has no issues there – its subscription numbers are strong.
Enjoy your Netflix, and then say goodbye when you’ve squeezed all the juice you can. A sure sign of this is spending more time surfing show descriptions than actually watching anything. The immediate payoff is cutting your household spending by around $20 per month if you have a plan with no ads. Try cancelling one or two other subs and the savings start to get significant.
From readers
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools and guides
A look at how to qualify for the maximum Canada Pension Plan retirement benefit.
