We know that people don’t mind spending a few extra bucks if it means they’ll be more comfortable. Nearly seven in 10 homeowners admit that they would be willing to pay more on central air conditioning in their homes, for instance.
But are people willing to continually spend more and more for digital entertainment purposes, especially when you can just borrow your roommate’s Netflix password?
When it comes to digital entertainment, especially streaming services, Millennials are watching more content than any other generation. But because of a tough job market, hearty student loans, and other financial circumstances, many Millennials aren’t able to afford these kinds of streaming services.
According to Business Insider, 11% of Forrester survey respondents believe that Hulu is too expensive at $7.99 a month, and 18% believe HBO Now is too expensive at $14.99 a month. Conversely, only 5% of respondents thought the slightly more expensive Netflix service ($9.99 a month) was actually too expensive.
Despite the prices, it seems as though Millennials will continue watching their favorite shows, even if they can’t afford them. Netflix plans on spending $6 billion to release roughly 1,000 hours new content — and Millennials will certainly watch as much as they can, even if they are technically stealing that content through pilfered passwords.
However, Forbes reports that the many Millennials who “borrow” their friends’ or parents’ Netflix login information may actually be helping the company grow. Netflix’s stock is now expected to double over the next few years, in large part because investors expect those Millennials who have been watching shows for free will eventually purchase their own subscriptions.
“We believe that Netflix will benefit as its 70 million-plus audience of nonpaying, often younger users transition to ages at which they become more likely to pay for Netflix,” said Ralph Schackart, an analyst for William Blair. “If Netflix can convert 3% of this audience to new subscribers annually, we estimate the company could add 5.3 million domestic subscriptions by 2020 through this demographic [Millennials] lift alone.”
Netflix currently has over 47.1 million subscribers in the United States and another 36 million overseas.