Netflix Price Increase: Poll Suggests Users Ready to Dump Netflix

Netflix has become increasingly popular lately, and not for the right reasons, as it announced that it plans a 60 percent hike for subscribers who wish to buy both the DVD and streaming packages.

And polls are reflecting that discontent.

The Business Insider took a poll of their readers and what they found is this: forty-one percent would just cancel their subscription entirely, and 35 percent of readers said they'll opt just for streaming.

Why are people so outraged, you ask?

Well, previously, Netflix offered a base plan for $9.99; this included unlimited streaming content plus unlimited DVDs by mail. Now, the streaming and DVD rental options are being offered separately at $7.99 apiece. This means that those willing to pay the difference will have to add six more buckaroos to their entertainment budget.

But while many customers are grumbling about the increase - see the nearly 30,000 comments on Netflix's Facebook page, most of them objections -shares of Netflix has been surging, reflecting the movie-DVD online streamer's huge popularity.

Since early March, the stock's value has jumped about 50 percent to just under $300 per share, an all-time high.

But there are concerns that the stock might now be overbought. The $15.4-billion company (by market-cap) trades at a lofty price-earnings ratio of about 83.7 (according to Google Finance).

A blogger on Seeking Alpha wrote: "I think the recent price hikes are a prelude to a disappointing earnings announcement on July 18. I think margins will be worse, and possibly subscriber growth will not meet expectations. I think now is the time to sell." [However, the blogger still likes Netflix's longer-term prospects.]

The higher prices will be effective immediately for new customers, while existing subscribers will not see their bills rise until September 1.