Netflix has become Public Enemy #1 since announcing what amounts to a 60% price hike for subscribers who wish to buy both the DVD and streaming packages.
Previously, Netflix offered a base plan for $9.99 that included unlimited streaming content plus one DVD rental a month. Now, the streaming and DVD rental options are being offered separately, at $7.99 a piece. For those willing to pay the difference, it will add six dollars to their monthly entertainment budget.
While nobody likes the idea of companies charging more to loyal customers simply because they can, the social media-based attacks on Netflix feel a little disproportionate when you consider the actual dollar amounts at stake.
There are nearly 30,000 comments on Netflix's Facebook page as of Tuesday morning, less than a day after Netflix posted their announcement of the price increase on their page. The overwhelming majority of the comments indicate objection, if not downright outrage, at the price hike - with many commenters threatening to cancel their subcriptions or announcing they already have.
As CNET reported, many Facebook users have liked' Netflix simply so they can post comments on the company's official page. Lauren F. is one such person. In her comment on the announcement, she writes:
I just liked you so that I can tell you what a shockingly bad business move this is. I've had Netflix about a year, and this is the second price hike I've seen. I canceled my Blockbuster online membership to switch to Netflix. Now, I'm going to have to pay more money than I paid at Blockbuster, and the DVDs are still going to be 28 days behind??? You took away the very edge you had in the market! Who's smoking crack over there? I'm canceling and going back to Blockbuster. (Which, by the way, I'd love to be a fly on their wall right now. There's hope for them after all!)
A common refrain among the complaints is that Netflix's stock prices have been soaring, and that the company does not need to increase revenue streams.
Digital protesters have also crowded the Netflix site itself: On Tuesday, Netflix posted an official, detailed announcement of the change on The Netflix Blog', which has so far accumulated over 6,000 (mostly) angry comments.
A popular post by James M. points out that the Netflix stock price has nearly tripled in the last year. I will forever be kicking myself in the pants for not taking 100% of my retirement fund and not investing it in Netflix a year ago, he writes. But he believes that the bad business decision will now cost both customers and shareholders:
...explain to me as a SHAREHOLDER IN YOUR COMPANY AS WELL AS A CUSTOMER why my stock is going to start dropping because you got greedy!
BAD FORM, Netflix!
Forbes blogger Elisa Doucette, for one, is tired of all the whining.
What completely befuddles me about this entire situation is the belief...that somehow we as consumers are OWED something by Netflix.
It is no secret that the studios, broadband providers and pigeon-lady-on-the-street-corner are out for a chunk of Netflix subscription rates... This past January Hollywood insiders projected that Netflix would have to pay close to $1.2 Billion (yes, that is with a 'B') in licensing fees in 2012.
They aren't exactly a non-profit foundation. Last I checked, Netflix is a publicly traded FOR-PROFIT company.
Doucette ends her post with a suggestion that people who want cheaper movie rentals should get a library card.
A Washington Post blog article suggests that a major component of the backlash is not neccessarily the pricing change itself, but the way it was communicated. Indeed, the wording and timing of the announcements showed little indication that Netflix was expecting any major fallout from their decision.
The abruptness of the announcement and the fact that it was broadcast on social media before customers were informed directly may have contributed to the sense of betrayal.
I found out about this on Facebook a full 18 hours before I got an e-mail about the upcoming changes to my account from Netflix, wrote one commenter on Cecilia Kang's post about the price increase. That, in my opinion, is completely unprofessional.