WATCH: More Evidence Shows Snapchat Doesn't Delete Your Photos
Susan Mercandetti: The Secret to a Successful Life
Netflix Raises Prices by 60 Percent, Sparks Social Media Outrage
Customers take to Twitter and Facebook to vent their anger, while tech bloggers and competitors react to Netflix's controversial move.
Posted 7/ 13 11 at 9:30 AM | News, Money, Sales, Consumer Products & Services
Text Size:
A A A
Netflix's announcement on Tuesday that it will restructure its pricing plan, essentially raising its prices by 60 percent, was accompanied by a relatively mild explanation on its blog: "Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs."However, the reaction to Netflix, a longtime customer favorite, has been anything but mild. Faced with having to pay about $16 for separate streaming and DVD plans instead of the current $9.99 fee for both, some of Netflix's 22.3 milion U.S. customers took to social media outlets to vent their anger, while tech bloggers scratched their virtual heads and competitors reacted to the blood in the water.
More than 4,800 customers posted comments on the Netflix blog on Tuesday, mostly complaining about the limited streaming catalog and threatening to drop one or both services rather than pay full price for both.
Netflix also announced the new price plan on its Facebook page, sparking almost 20,000 comments by the end of the day. Comments included, "Great idea to kick the people while their [sic] down ... So much for customer satisfaction. Greedy, Greedy, Greedy," and "Can you even IMAGINE how much champagne was flowing at the Redbox/Hulu/Amazon offices today!? HA! Good for them!"
A Facebook page titled Cancel Netflix is proposing a movement to cancel Netflix services en masse on September 1, when the pricing change is set to go into effect.
"Dear Netflix" was a top trending topic, with tweets such as, "Dear Netflix, your new prices make going to the movies look affordable," "Dear Netflix: Are you trying to save Blockbuster?" "Goodbye red envelopes, hello red boxes," and the often retweeted, "Dear Netflix, As much as we love the 'cerebral romantic comedy documentaries' genre you suggested, paying double is insane. k thx bai."
Stephen Colbert weighed in via Twitter as well: "Netflix is increasing their rental fees. Great, now it's going to cost even more to have 'Precious' on my coffee table for four months."
About 80 percent of Netflix's U.S. subscribers currently have the combination streaming and DVD plan, according to Tony Wible, an analyst with Janney Capital Markets. While many of those customers may now be considering a switch to big players such as Redbox, Amazon Direct, Hulu or Apple TV, Eric Blattberg of Wired predicted that up-and-comer Zediva is another business that could see an increase in business. The video streaming company offers digital streaming of new releases for two weeks for $2 per rental.
Blockbuster, which Netflix has practically brought to death's door, pounced on the news by emphasizing some of its lowered prices to the media and customers, although The Wall Street Journal mocked its efforts. Meanwhile, Redbox responded to an MSNBC.com article by sharing some posts from its Facebook page: "I am renting 5 tonight just to show you my support and to rebel against Netflix!" and "C'mon Redbox -- you need to create a streaming option to supplement your DVD rental business -- Netflix's decision today definitely leaves a gaping hole in the market now. Boo Netflix!"
Several tech bloggers covered the news as outraged consumers themselves. Athima Chansanchai of MSNBC, an 11-year Netflix customer, reported getting the shocking news via an email from Netflix.
Matt Burns of TechCrunch relayed a common subscriber experience that contradicts Netflix's rationale: "Previously, I know at least in my house, the DVD option was a nice backup just in case the particular title wasn't available for streaming; it really felt like a $2 add-on. This happened a few times over the last year since Netflix's streaming catalog is around 20k titles where they have 100k available on DVD."
And Peter Kafka of All Things D described the sudden drop in Netflix's value to customers that accompanied its increase in price. "One of the reasons I really enjoyed Netflix was the notion that it provided instant gratification -- I can stream anything they have with a click -- but that it gave me the option to get even more, with a little bit of planning: Add a disc to your queue, then wait a day (or two, max), then boot up the DVD player," he wrote. "I rarely took them up on the offer ... but it was nice to know it was there. And it made me feel like I was getting good value for my $10 a month. Now I'm a little less enthusiastic, and I bet I'm not the only subscriber in that boat."
Getty Images
- 'Marriage Penalty' Could Make Costly Return - CNNMoney
- Oil Rises on Optimism for Cliff Deal - FOXBusiness
- Dow 2012: The Studs and Duds - InvestorPlace
- Turning the Corner: Why 2012 Wasn't as Bad as You Think - The Motley Fool
- World’s Longest High-Speed Rail Line Unveiled In China - IBTimes
- FORGET THE DEFICIT: Here's The Real Reason Liberals Want To Hike Taxes On The Rich - Business Insider
- CEOs to Fire in 2013 - 24/7 Wall St.
- DailyFinance Market Minute - DailyFinance
Comments (Page 1 of 2)
I receieved that email last night from netflix. Bingo down to streaming only. That is a ridiculous hike in these times from long standing customers! Perhaps should have tried it on newcomers first. Shot themselves in the foot!
Well, they are no different thant CABLE TV.. They have gone up and up
Just as long as they can continue with their SOCIALIZED TV stystem
Forcing us to Pay for Channels We don't want
and Can't evendelete them and have to dial in the channels we do want to see..
And all the other Tricks they use , like a Glimpse at another program, but you have to pay more for it
If we could get Free TV via a Anntenna? We would.. Butt, I bet that too will be gone soon as well
A Bunch of Greedy SOB's that have ruined TV
One Word: BitTORRENT
WHO?
NETFLIX!
I guess I should just go back to Redbox. I don't watch enough movies per month to justify $20.00.
this really makes me angry I was watching a streaming mini-series and right in the middle of it I had to get the rest on DVD's because they hadn't paid the license to continue streaming. Now they want to charge more too when half of their streaming doesn't download and freezes on a regular basis
Well everyone, try FAMILY VIDEO!! They have the best rental prices, great customer service and have movies the day they come out!! Why pay another one of Netflix's price hikes for the same crappy service or visit an outdated Redbox when you could go to FAMILY VIDEO!!
Outrageous! I simply won't allow any company to increase the price of any service they provide me by 60%, unfortunately I will be forced to close my NetFlix Account completely in principle. When I initially bought the service it was $8.99/mo and then at some point it went up to $9.99/mo which was reasonable. Sorry Netflix $16.00/mo is pure greed and I wont support any company's greed. Closing the account today and then looking in to other options below $10.
I had a 2-at-a-time DVD package with Netflix that I cancelled last year because I wasn't watching enough DVDs to make it worth while. Netflix wooed me back in April when they seduced me with the streaming/DVD combo for $9.99 - I went out and bought a blueray that works with Netflix so I could do it. Was quite happy - streaming worked nice and the DVDs covered what wasn't available via streaming. I'm totally outraged with the increase...I feel used - hook me for a few months with a great deal and then almost DOUBLE the cost. Do they think that the consumer is completely stupid??? In these tenuous economic times Netflix's greedy move is really quite sickening. ..I will cancel my service on September 1st if they don't reconsider.
I wouldn't mind the increase if Netflix had better titles in their instant stream. Their new releases aren't so new and I get caught up in a TV show (an old one mind you) only to have the final 6 episodes mysteriously disappear. We have the bundle package right now but I plan on downgrading to the streaming-only because of the Netflix app on our TV is so convenient. Justifies my hulu streaming app now!
I have NETFLIX on my Xbox 360 and PS3. I will be joining the BIG TURNOFF on Septemer 1. Really? 60% increase? Really? So as a business exec, as I am, i guess the thinking is that we will make the ame money on those that stay and the others will come crawling back? Ummm NO! I am done! I will go back to the RedBox or Digital Cable ON DEMAND! I mean - at least then I don't have to wait three weeks to actually SEE a NEW RELEASE! Not enough copies. Not enough Streaming. Not Enough for my money! See ya Netflix!
I too, will cancel my service prior to September 1. I've been a Netflix customer since they started. Wrong time of the century to get that greedy.
This isn't shocking to me.The bigger a company gets the more they money and fees they create,No company will ever decrease prices especially when people start saying how great they are,how wonderful their service is and how happy they are.The mintue that happens you can guarantee higher fees,customer service charges and less selection choice of products.So now you boycott Netflix go back to Red box and they will increase fees!Then back to Blockbuster and they increase fees.Meanwhile cable tv and satellite services have to compete as well just to offer packages that people can afford!
All I can say is: BYE BYE NETFLIX. You have developed pure greed because you think you can. Guess what, won't work, your customer are going to drop like FLIES............... See ya, cancelling immediately. You must be absolutely NUTS if you think people will pay that type of increase....................................
It's like Netflix is wanting to go out of business. Someone else will fill their shoes at their current prices. It was fun for a little while but I'm saying goodbye to Netflix.
good bye Netflix! I refuse to continue to pay more! Have fun loosing alot of customers! You rather see more dollar signs than more customers. Lets see what Redbox has to rent? maybe even Blockbuster? can't be worse that Netflix.
FAMILY VIDEO I will try them and if not im allways around the redbox. We just had the price raised not long ago. If everyone drops them what good would it do to raise the price? Time for them to join blockbuster and hollywood lol Im done with netflix soon as they go to raise it on me in september :)
sell all there stock
I will no longer use them. Sorry guys.