Long run, they are corporate morons.
T-Mobile was "paying" for a rarely-used account on my family plan. Parents used it in another state. I occasionally used it. My brother logged in once in awhile. On any given week, it might see like 4 hours of collective viewership.
Turns out TMobile's contribution only covered the first $8. I have been paying another $10/mo. out of my own pocket and wasn't batting an eye.
Netflix was getting $18 a month for doing almost nothing! And that could have continued for many more years without my even questioning it.
BUT... One day I couldn't sign onto my own Netflix account that I pay for. Evidently, I'm not in my own household? That led to my discovery of the gargantuan amount I was paying for a service I barely use anymore.
So now, thanks to their greed, Netflix gets $0 from me. And not a single family member has phoned to ask why Netflix no longer works.
Some executives in Los Gatos may soon learn Econ 101's supply-and-demand curve.
But.....
A more expensive product becomes a more price-sensitive product. Now one customer represents income from 3-4 customers.
Recession hits. People are more likely to cancel something that is $25/mo than $8/mo. And each cancellation is like three cancellations.
Going "premium" is a valid strategy. But since we haven't had a serious recession in 15 years, I believe it's a shortsighted one.