Netflix Price Increase: 'Let Them Eat Cake?'

By | July 27 2011 12:19 PM

Netflix. Netflix. Netflix. It seems the company, which was once sitting on its comfy throne as the king of all DVD rentals and streaming memberships, has managed to upset the citizens of the kingdom it reigns over. Netflix has shown little effort to make the mere commoners, who elevated Netflix to its current position, comfortable with the new price change. It's as if Netflix is saying, "let them eat cake." But they aren't.

Reuters

Netflix faces even more competition in streaming movies -- this time from Dish Network's new service.

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In a recent letter to investors, Netflix defended the price increase:

"It is expected and unfortunate that our DVD subscribers who also use streaming don't like our price change," Netflix said. And in a nonchalant manner, they accepted the fact that "some subscribers will cancel Netflix or downgrade their Netflix plans." But regardless of the uproar their price change has created, Netflix remains optimistic about its future and believes it will continue to hold its place as king of the DVD-streaming empire.

In their letter to shareholders, they somewhat unconvincingly stated, "We expect most to stay with us because each of our $7.99 plans is an incredible value."

But why does Netflix seem to believe so strongly that their company provides a better service than say, Blockbuster, Redbox or Hulu? A. Because they have to; B. Because they believe it. If they want the people to get on board, they have to believe that the decision they made was the right one.

Though it appears their "let them eat cake" attitude is an unjust one, especially since so many subscribers supported them for so many years, in reality, Netflix is doing the only thing it can - waiting for the storm to pass.

And if it seems like a ruse, and you believe they are quaking in their boots, think again.

As its customers throw their arms (and maybe even a finger) up, as competitors scheme on how to overthrow the King; as the media critiques, prods, and picks at Netflix and its faults (guilty as charged), Netflix is in the process of cooking up some delicious new treats. These new "treats" come in the form of new contracts with companies such as Dreamworks, expansion of its distribution in Latin America, and new international deals with CBS.

And so while the mob is throwing a possibly well-deserved tantrum, stomping their feet and shaking their fists, Netflix is busy securing its spot as the dominating company in its field.

But for those who feel betrayed, or who believe the price increase is simply too much to accept, there are other options. Choices range from Blockbuster, Hulu, Redbox, Amazon Prime, iTunes, to Internet network Web sites that stream their TV shows within 24 hours of it airing live.

The days of a $9.99 value may be gone, but hope is not lost. There are other options to consider. And if Netflix gets their way, they will hear "long live the King."