Netflix Taking Heat Over Price Increase
It’s normal for grumbling to take place when the price of a product or service goes up. However, the displeasure being expressed by consumers about a 60 percent price increase from Netflix goes well beyond grumbling.
The video rental service announced it was ending its $9.99 monthly plan that allowed subscribers to watch an unlimited number of titles online while renting one DVD through the mail. Beginning in September, consumers who want the same deal will have to pay $7.99 for instant streaming and $7.99 to receive rental disks delivered to their homes ($15.98 total).
A Los Angeles Times article citing Tony Wible, an analyst at Janney Capital Markets, as its source estimates that roughly 80 percent of Netflix customers are expected to be affected by the change.
Phone lines to the company were reportedly jammed as angry customers waited to vent. According to several reports, one firm, BTIG Research, placed 35 calls to Netflix yesterday and only got through 15 times after waits of between nine and 15 minutes.
As of 7:31 a.m. EST today, the Netflix Facebook page had 55,843 comments. Most were overwhelmingly negative. Here are a few quotes that didn’t include expletives directed at the company.
- "If you’re unhappy about this cancel your account. You can always go back later if you choose to. It is the only thing that will get through to them. No amount of Facebook protest groups or angry emails will work. They are all about the money. So hit em where it hurts!"
- "Check out the free trials at Hulu and Blockbuster."
- "Call me gone… Long live RedBox."
- "Netflix needs to explain why a 60 percent increase was necessary after raising their rates just a few short months ago! The streaming is old stuff. DVDs can be rented for a buck at RedBox. Bye Bye Netflix, you cut your own throat just like Blockbuster did."
Steve Swasey, a spokesperson for Netflix, said the company anticipated negative reactions to its move.
"We tested, we researched, we analyzed," he told CNET. "We knew what the reaction would be. We are not surprised. We knew that there would be some people upset by the service and with the price being adjusted."
Some people? Really? Mr. Swasey and others at Netflix might want to check Facebook.
- Netflix – Facebook
- Netflix raising prices as much as 60% – Los Angeles Times
- Netflix Phones Ringing Off the Hook in Response to Price Hike – The Hollywood Reporter
- Netflix Customers Jam Phones Over Price Increase, Analyst Greenfield Says – Bloomberg News
- Netflix price rise draws user ire, investor glee – Reuters
- Netflix managers anticipated angry reaction – CNET News
Discussion Questions: What do you expect to be the fallout from the Netflix price increase? How would you respond from this point forward if you were Netflix?