Netflix raised the Internet-plus-DVDs-in-the-mail plan from $9.99 per month to $15.98 per month, triggering massive outrage from movie buffs.
Netflix has raised the price by 60%. With the new plan, its customers will get online streaming of movies and one mailed DVD at a time. The company said that the reason of the price increase is that the cost to send physical DVD disc is too expensive but customer wants Nexflix to keep that service. However the price of the online streaming-only of movie will not be changed from current $7.99. The price change will take effect in September for the current Netflix customers but it took effect Tuesday for new customers.
Netflix posted an announcement on its Facebook page about the price hike at 10:22 AM on July 12th. There have been 38,440 comments posted after one day and only 791 people clicked on the 'Like' button.
Netflix page on Facebook has 1,554,598 fans and the new price has resulted in creation of multiple Facebook pages that deliberate on the price change.
A fun page titled “Cancel Netflix” has 2916 fans. Facebook users joined in the fan page posted comments such as “Why would I pay 60% more for 98% of crappy movies to stream???? Unbelievable!!”, “Already canceled”, “Cancelled today”, “Cancelling on 7/17/11”, “switching to AMAZON as of today”, “Forget waiting. Did it today” or “Cancelled my membership last night, HELLO Redbox!” were some of the caustic comments put up.
The other fan page named “1,000,000 people who will not stand for Netflix's new prices” got 2473 fans who posted comment like “My account is cancelled completely.”, “Another greedy company” or “We've already canceled ours. Not going to go along with this money-grab strategy”.
There is a fan page called “Stop the Netflix rate increase” supported by 1995 fans. Fan page “I used to love Netflix until they decided to rip me off” has 854 fans. “Boycott Netflix” has 588 fans. Also “I Unlike Netflix Today” has 300 fans.
On Twitter, #Netflix hashtag or #Dear Netflix hashtag has become popular as people are commenting about the price change.
A Tweeter user posted “#Dear Netflix I've never used you, but your rate/price increase has brought out the worst in Americans. Please stop their whining. PLEASE.” The other Tweet says “#Dear Netflix, I want to still love you, but price hike + M.I.A. Dexter is making me rethink this relationship. Why would you do this to us?” Another Twitter user told “#Dear Netflix, not happy with the price increase. This is the most arbitrary price change with no increase in services. Redbox here I come.”
Last time Netflix announced a major price change was in last November. The change came with the new streaming service for $8 per month. At that time user had an option to pay $2 more for one DVD. Netflix’s vice president of marketing Jessie Becker posted a blog update saying that “we didn’t anticipate offering DVD-only plans” at that time. She said “there is still a very large continuing demand for DVDs both from our existing members as well as nonmembers”.
The blog posting was up on July 12th and 8711 Facebook comments and 5000 Blogger comments have been posted since then. One of the Facebook comment with 389 people liked said that “I think you should fire your marketing department. Anyone that comes up with a 60% price increase scheme and forgets to NOT include even a minimal increase to the service or content at the same time to distract, confuse, bamboozle, or lie to your customers is just stupid.”
Arash Amel, a research director for IHS Screen Digest, told New York Times, “the latest step in a long-term transition toward becoming a next-generation premium television business”. He said further changes to Netflix’s monthly prices should be expected in the next couple of years as the company’s growth rate slows and as it pays hundreds of millions of dollars more to license streams of movies and TV shows.
Netflix said its chief service and operations officer Andy Rendich will lead a team focusing on physical DVD service from now on. Netflix expects that other executives can concentrate on online streaming service. Rendich worked as VP of Operations at Netflix, VP Systems Development at Netflix and MES Manager at Candescent Technologies earlier.
Netflix’s Facebook fan page says that Netflix has more than 20 million members in the United States and Canada. The video company provides movies streaming over the Internet right on their PC, Mac, Blu-ray player, Wii, PS3, Xbox, iPad, iPhone and other devices.
CBSNEWS introduced 5 alternative services so that disappointed Netflix user can replace their video services. The list includes Amazon, Hulu, Green CINE, BLOCKBUSTER and Redbox.