Netflix price hike creates social media firestorm

Netflix price hike creates social media firestorm

Summary: It seems that people are unhappy with Netflix and its decision to change the pricing plans and effectively raise the price of the DVD rental plan by 60%. Very, very, very unhappy.

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It seems that people are unhappy with Netflix and its decision to change the pricing plans and effectively raise the price of the DVD rental plan by 60%. Very, very, very unhappy.

For those of you who've not been keeping up, I'll let my colleague Rachel King explain the changes:

"For subscribers who still want both unlimited streaming and at least the unlimited one DVD out at-a-time plan, they'll have to fork over $15.98 per month (thus, $7.99 + $7.99). For reference, up until now, the rate for the comparative unlimited DVD and streaming plan has been $9.99 per month."

What's not mentioned is the reason behind this change. According to CNN Money, Netflix has been forced to hike prices because it needs to find some extra $2 billion in content costs for the studios next year. That's not walking around money, and it seems that Netflix is asking customers to turn out their pockets to foot this bill. ZDNet editor-in-chief Larry Dignan agrees - "Netflix's price changes are all about the dollars."

Netflix throws the phrase "terrific value" around a lot in its announcement of the price changes, but customers feel differently. Very differently. In fact, within minutes of the announcement a social media fireball erupted, with Netflix at its center.

[poll id="651"]

First, there are the comments on the announcement blog post itself. These are pretty dire.

"Are you F#**!!@! kidding me?"

"Way to go again Netflix - Divide and Conquer - EPIC FAIL!!"

"I know I'll be cancelling my service and going with Blockbuster soon."

"Sept.1 I'll be canceling.I do without cable I think I can do without Netflix."

"Peace out. You're streaming selection is horrible anyway."

"Thanks netflix, you just increased my bill too! Currently I am paying 9.99 for 1 DVD and Unlimited Streaming and you want me to pay 15.98!? Tell me how that is cheaper than 9.99."

Netflix also has Facebook comments, which also describe the price changes as a ball of FAIL:

Twitter is also a Netflix bloodbath. The trending topic "Dear Netflix" was the epicenter for most of the hate and rage directed against Netflix.

I did find someone who is still happy with Netflix ...

My take ... well, I don't think Netflix made this move out of greed. The company's bills are going to increase and it needs a way to keep the lights on. That said, I don't think that the company has done a good job of communicating the reason behind the change.

The change might not be all bad either ... it makes people look at their subscription and ask whether they really want/need/use it. It also makes people look around for a different or better suited deal. Also not a bad thing.

Topic: Social Enterprise

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  • RE: Netflix price hike creates social media firestorm

    In Canada we only have unlimited streaming for $7.99/month, though the ridiculous bandwidth caps make that rather limited anyway (major ISPs who also happen to be cable and satellite companies lowered the bandwidth caps on most of their packages when Netflix started here last fall...) Selection is still limited because they're having a hard time getting the distribution rights (some of which are owned by parent or sister companies of the cable/satellite Cos.) Add to that studios smelling the money (with Netflix becoming increasingly popular), and it's not surprising that all of a sudden Netflix have to increase their prices. Netflix is a good deal for consumers, and their competitors don't like that, and the studios/content owners want to squeeze out more out of them. Unfortunately in the end it's the customer that loses - Netflix has to pay, and they can't run a money-losing business so they have to pass on the cost.

    I'm predicting a price increase in Canada soon - lots of lobbyists for "artists" and such want a piece of Netflix's pie and the money will have to come from somewhere.

    It's called "ruining a good thing."
    MikeR666
    • RE: Netflix price hike creates social media firestorm

      Hate to say it however this is exactly why most, not all, people pirate media. I have tried to go the legal route however now that the studios are the source, I have cancelled my membership...to Pirate Bay I will go. Hey Netflix and MPAA...see ya's ;).
      mbehmazia
      • RE: Netflix price hike creates social media firestorm

        @mbehmazia@... I agree completely. I have no problems paying for content if it's reasonable....but when prices become unreasonable, I turn to piracy.

        I had the three DVD plan - mainly out of laziness; I would keep the DVD's for weeks - but with the price increase I switched to the 2 DVD plan. Netflix will not be getting any additional money out of me, but I plan to turn over my DVDs much more quickly - so they have at least as much work (from me) as before.
        kymac
      • RE: Netflix price hike creates social media firestorm

        @mbehmazia@... Theft is theft. Resorting to piracy because you don't like the price of movies is, IMHO, no different than resorting to shoplifting because you don't like the price of designer jeans.

        There are options if we're not happy with the pricing, but for me becoming a thief is not one of them.
        pstjohn
      • RE: Netflix price hike creates social media firestorm

        @mbehmazia@... <br><br>I am not gonna say I support pirating at all because further more I Don't. I admit I have used the Pirate bay on many things, but I soon delete the stuff and use it simply for a full working Demo more or less. More times I delete the whatever inside 45 minutes and never keep or burn the stuff. 80% of my purchases BTW, are of direct association of the illegal activities I Have participated in in the past. If I hadn't Downloaded it on the Piratebay or other torrent trackers I would never have bought it to at all. Developers and other Art Forms needs to realize the technology they have here. Release Free full versions, or Music on this stuff, and then have them tied to a location to verify ownership, Deleting the content ofter so many hours of listening for music, and so many minutes for software. By then we know it is worthy. BTW this isn't' the same as Streaming radio like Pandora, Pandora isn't' so portable. After all most of us have high speed internet and devices that can use the internet anymore, like iTouch, iPhones, Zune. Basically use the Stuff for what it is worth and stop ripping us off<br><br><br>Now on the supportive side of the reply here, I can totally see the reason that pirating has become a problem at all. I will not follow up on the flaming on this comment at all so you guys know, but Pirating is the direct result of the people who sell the merchandise. If Game Developers didn't charge us $50 a game on release, we wouldn't be temped to even download the stuff for even the reasons I do in my activities int eh past. Yes most people download the material without the intent of ever buying, which is the problem at hand here, but Really think about it. . I will use Call of Duty here. with new releases in the $60 range, and millions sold, do you really think that the people who developed that software deserve 60 million in pay checks, or even 10% of that? yes COD has a Free online server to use, or did, now the rip off is even more, as the current games sport game servers on everyday user PC's. The value of that $60 is even less. No Software dev needs 60 Million in there pockets to pay developers and employee's<br><br>Movies, this is completely obvious, the movies we buy and watch to day have been remade for 30 years, at least, what is so special about them that they need to be as high as 35 for director/special releases. get real million's to billions buy the movies around the world, more freely then Games. And movie companies have millions of movies to sell and profit on. <br><br>This is the Argument with pirating, and Frankly I understand why people do it. With these two examples the amount of money lost realistically is probably 40% and even that 40% loss is still providing big profits. No Developer makes more then 10k a year on a single Software, and why should they when they will just release a new version next year. If you want more produce something new, and at least good, and get away from typical, and your supporters will be more likely to support your rip-offs. At least operating systems are the same for 3-6 years without major changes, and if you really look into it, OS is cheaper then the software you upgrade regularly, and it is even worse for gamers. I'm not gonna touch Music, because well this post did it between the lines
        Ez_Customs
      • RE: Netflix price hike creates social media firestorm

        @mbehmazia@... I agree that this will probably lead to an increase in pirating but do not agree that most (let alone all) people currently pirate media. If that were the case services like Netflix wouldn't even have a chance.
        non-biased
      • RE: Netflix price hike creates social media firestorm

        @Ez_Customs Who are you to determine what a developer should or shouldn't make on their work? If you don't like the cost then don't buy it but don't try to use the price as your justification of stealing. You have no right to somebody else's work unless they are willingly giving it away for free or you have paid their asking price. The fact that you delete what you have pirated within 45 minutes doesn't change anything. If you then turn around and purchase the item that's great but it doesn't justify your belief that they should offer up full works for free or that you should determine what the value of their work is. If the price is too high then people won't buy and the price will come down. Apparently that isn't the case with COD.
        non-biased
    • RE: Netflix price hike creates social media firestorm

      @Mike (not Cox)
      As long as the economy of online streaming is scaled the same as it is for ebooks I'll be ok with it. (i.e. a Hard back book runs you about $20 to $50...the same book in ebook form is $3.99 to $9.99). The same should be true of any other form of media.
      VRSpock
      • RE: Netflix price hike creates social media firestorm

        @VRSpock

        I don't know where you're getting your ebooks, but Kindle prices mostly START at $9.99 and go up from there, especially on new books. Occasionally you see something on sale for $7 or $8, but it doesn't last long. Often, the difference between the paper copy of the book and the Kindle version is about $3. Given the cost of printing and shipping, that makes no sense at all, but whatever the market will bear, as they say...
        Cyraxote
      • RE: Netflix price hike creates social media firestorm

        @VRSpock
        Correction: They *should* be $3.99 or less, but that never happens.
        briank@...
    • RE: Netflix price hike creates social media firestorm

      @Mike (not Cox)
      Right on. The telecoms were using the competition from Netflix to bring in UBB before the CRTC as we speak. People cancel their Netfix, means even move cash into the pockets of the telecoms and their already obscene profits
      csumbler
    • RE: Netflix price hike creates social media firestorm

      OMG, i received my notice from Netflix price increase notice, it went up even more for one Blu Rey at a time. I canceled it right away. What a rip, I can go to the Redbox.
      I guess it is the snag em and screw em method.
      Geekstuff1
    • RE: Netflix price hike creates social media firestorm

      @Mike (not Cox) Canada as the UK and other countries suck for ISP's because they overcharge, throttle your bandwidth, and the have the 3 strike rule for torrents. I fear that the USA will take up that model one day but it is not here yet and as long as our leaders are bickering like school children it will be a while.
      adaedone@...
    • RE: Netflix price hike creates social media firestorm

      @Mike (not Cox) The studios see a gold mine so they want to squeeze out all the juice. Netflix's rate plan could have been much higher. It's still a great deal to be able to choose a movie and watch it when you want to without needing to buy the DVD. Besides, they offer movies I would never of thought of watching and to my surprise they turn out to be goods movies. No one like to pay extra for anything. But not having having it or instituting commercials would be unacceptable as an alternative.
      Phandl@...
  • well, I don&acirc;??t think Netflix made this move out of greed

    F U Adrian Kingsley-Hughes
    sackbut
    • Then enlighten us with your &quot;wisdom&quot;

      @sackbut as to the reason why this cost is being passed directly on to the customers or just troll here and hurl insults around - which is after all what you do best. In other words F U sackbut.
      athynz
    • RE: Netflix price hike creates social media firestorm

      @sackbut <br>The reason is obvious. It is not greed. It is economics. The overhead of postage AND all the processing hubs that send/receive DVDs by mail are a huge cost factor for Netflix. <br><br>They should use the money generated from this move to buy more streaming content....and that's exactly what they will be doing. It's not like the cable company upping your bill by $100 per month and then looking at you all funny when you ask them what you are getting in return for that increase. Sometime I wonder if all the people complaining are hired by the Cable companies to complain.<br><br>I called Netflix customer support as soon as I got the email about the price changes. My concern was being able to stream on 2 different devices at once because we stream on the tv in the living room and sometimes simultaneously on a desktop computer elsewhere in the house. I had heard that if I switched to the streaming only plan I could only stream on 1 device at a time....but the support agent I spoke with said while that is what is stated, in truth, you can stream on two devices at once. I'd gladly pay a few more dollars to stream on two devices if I have to. I feel that switching from $9.99 per month for streaming + 1 DVD to $7.99 per month for streaming only is steal for me with all the content that my family watches (3 to 6 hours per day, 7 days per week at times).

      As for their DVD's....well.....we just mailed back The Box to them after switching to streaming only. We only had the disc for just over a year and the envelope sleeve is turning all yellow. DVD's are obsolete.
      VRSpock
      • RE: Netflix price hike creates social media firestorm

        @VRSpock <br><br>B.S. <br>The company is making LOTS of money. Raisng rates without any added benefits? Bad business move. Dropping service and selling my stock.

        They are making lots of money after spending lots of money!
        They're raising prices in anticipation of raising content prices?
        Bad business move.
        Bottom line is it not worth the added $ period.
        Extreme Kahuna
      • RE: Netflix price hike creates social media firestorm

        @Extreme Kahuna
        They are making lots of money. They are also spending lots of money.

        The online streaming content business is quickly becoming a cut-throat business just like good old time television used to be a few years back before all the cable networks began suffering identity crisis and showing content that had nothing to do with what the network is all about.

        Netflix needs to be the biggest check writer out there for content if they want to continue to grow....and not just out-writing the other streaming providers either.
        VRSpock
      • RE: Netflix price hike creates social media firestorm

        @Extreme Kahuna It is not BS. Netflix raised the prices so they can continue to pay the licensing fees that keep going up for streaming rights. Hopefully they will also be able to increase the selection. (And no, I am not and have never been a netflix customer or user nor do I work for the cable company, the studios, or netflix -- I am self employed as a software engineer)
        chadpengar