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Netflix Raises Prices, What’s Next For Users?

Twitter provides some hints at how Netflix users will react to the pricing shifts

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Netflix Raises Prices, What’s Next For Users?
[ Social Media]

Today, Netflix dropped the bomb that it was doing away with its unlimited streaming / DVD combo plan in favor of separate plans for each service. Users (myself included) that want unlimited streaming options as well as 1-DVD-at-a-time rental enjoy a $9.99 a month plan at the time. Soon, that option won’t exist.

Moving forward, Netflix users will have the option of a $7.99 unlimited streaming service. instead of paying $2 extra for the one-at-a-time unlimited DVD service, users will now have to pay another $7.99 a month for that. This basically means that the $9.99 service was just increased about 60% to $15.98 a month.

If I had to sum up the initial reaction to this announcement in a few words, I think I might use “aw hell no.” Maybe just the world “indignant.”

What will Netflix users do now? The twitterverse is sounding off, and I will use varying tweets to discuss possible outcomes of this new pricing structure.

First, will users jump ship from Netflix to other content providers? Will Redbox, Hulu, and even cable companies benefit from the Netflix backlash?

So wait, I pay @netflix $6 more per month starting September 1? Hello, @redbox, it’s nice to meet you & you live only a block from my house. 25 minutes ago via web · powered by @socialditto

@wikiwikichowski Yea, I honestly am thinking of doing so as well, specially now that Hulu is on Xbox as well, no reason to stay with Netflix 24 minutes ago via web · powered by @socialditto

Basically, Netflix is handing cable co’s a huge gift, as its subscribers may bolt and buy on-demand from cable. 44 minutes ago via web · powered by @socialditto

Let’s break this down. Redbox: I get it. No commitment, $1 rentals. Roughly sixteen films from Redbox in one month would equate to the new streaming & DVD Netflix subscription. Users will have to determine whether or not thy can continue to extract enough value out of Netflix to justify the increased cost. Both Netflix and Redbox, however, have deals in place with most studios that make them wait a month before distributing new releases.

As far as Hulu goes, their streaming service is also $7.99 per month. Like Netflix, it too is available on Xbox360. Switching from one to the other doesn’t seem like it’s doing anything except changing the specific content you have access to.

The argument that cable companies will benefit from this pricing shift is one that fails to make sense to me. Using a cable provider’s on-demand service, rentals can run anywhere from $3 to $8 depending on whether or not it is in HD. Rent two or three of those and you are well over $16 for the month. Plus, subscription services like HBO and Showtime aren’t cheap either. The only draw I can see is that on-demand tends to make new releases available earlier than Netflix.

Will users make a choice and simply drop their streaming or DVD plans?

Okay, Netflix, I guess I won’t be getting DVDs or Blu-rays from you anymore. I’ll go streaming only if that’s how you wanna do this. 36 minutes ago via web · powered by @socialditto

I guess since I’ve had my most recent Netflix DVD rental since February I could probably do without the DVD plan. Streaming only for me! 38 minutes ago via web · powered by @socialditto

If users choose to drop either DVD or streaming, then their Netflix bill will actually be a little cheaper than before (considering they had both services to begin with).

But of course the streaming and DVD parts of Netflix are yin & yang, peanut butter & jelly. Streaming provides users with content instantly while the DVDs provide users with the content that isn’t offered via instant streaming.

To assuage the angry masses, Netflix should make a few more deals in the coming months to bring more content to streaming. That might help some people cope with the subscription changes.

Is the price increase really that big of a deal?

If an extra $6 a month for streaming and DVDs from Netflix affects your budget in the slightest way you’re doing something terribly wrong. 59 minutes ago via web · powered by @socialditto

Suck it up, you whiners. That is one way to interpret the backlash. An extra $6 a month, when extrapolated over the course of a year only totals an extra $72. To someone willing to pay $120 a year for their Netflix experience, is $192 going to break their bank?

And if that answer is no, then is it just about the principle of the thing? People get pissed when something that they come to take for granted is taken away from them. You are used to both streaming and DVDs for a low price? Too bad, says Netflix. It doesn’t “make great financial sense,” as they say on their blog today.

And if the answer is yes, then maybe switching to just one of the two services and paying roughly $96 a year could actually be beneficial.

Screw it, I’m just going to download everything.

What the fuck Netflix is revamping their pricing? I gotta pay $16 now? I’m THIS close to going back to pirate-only…. 51 minutes ago via web · powered by @socialditto

Will this pricing change put more people back on torrent sites? It’s not that everyone ever really left them – filesharing still exists (duh). But Netflix and Hulu serve as a companion to filesharing to some.

Will people that choose to only keep their streaming Netflix service simply revert to the internet to get the new releases that they want to watch? It’s definitely possible. And before you say anything, no, I’m not insinuating that Netflix is now responsible for increased piracy.

There’s no doubt that the new subscription structure will affect how people use the service that they love. On a final note, is it crazy to wonder if Netflix is simply taking their first step in completely weeding out physical DVDs from their service?

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Netflix Raises Prices, What’s Next For Users?
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  • http://thomasmoffett.com Ben Moffett

    I only use their streaming service anyway. If I’m going to get a dvd. I’m going to my redbox. I think that most everyone is doing the same which means the dvd by mail is becoming more of a “Who Cares” product.

    No big deal for me…

    • Ray

      Sorry. I’m really pissed. I bought a blu ray because of a net flix. Already changed my account to streaming only and may quit entirely. Very unhappy with that huge price increase. They deserve to lose business for screwing customers like that.

  • Jeff S

    I can assure Netflix that at a minimum they have lost my extra $2 a month for the DVD check-outs that I NEVER use anyway. I will use Redbox or for that matter Blockbuster, since now they have $1 a day rentals for everything in their store. The only reason I kept the Netflix anyway was due to the streaming, which is so limited that only my kids use it anyway.

    Big mistake Netflix…60% cost increase in the middle of a Recession…If I owned any Netflix stock, I would be sure to get out of it now…in fact, might be time to buy some “puts”

  • rachel l

    Its definitely more of a “principal of the matter” thing. My bill is going up 64% (10.99/mo to 17.99/mo). And they’re not giving me anything more than they were last month. Sure I can afford 17.99/mo. I could afford 39.99/mo or 99.99/mo if I really wanted to. Its not about if I can afford it– its about a company raising my bill by 64% for absolutely no reason apart from the fact that they can. I don’t want to do business with a company that treats their loyal customers like that. I have other options.

  • Jorge Alameda

    Enough is enough. Drop Netflix. Everyone should drop them at least for 6 months. Trust me, they will feel the pain when no money is coming in. Shame on Netflix. Shame on the studios too.

  • Shenelle

    So let me get this straight. My subscription is going up 60% and I get nothing extra in return? Have you forgotten it was your prices that set you apart? For $16 plus tax per month I may as well get a movie channel through cable. For all the streaming problems and hassle I’m going back to redbox and cable a la carte.

    Bad move Netflix, you’ll see.

  • Mr .byrd

    Well this should not come as a surprise to most of us who keep up with the news. Netflix is attempting to stop Physical Delivery period and go to a all Streaming platform. In order to do that they are going to have to piss-a-lot of folk off in the process by trying to ride out a minimal lost which is “GREED.” They should just simply say folks “You are stuck with the 7.99 the 2bucks for DVDs is going back in your pocket and all would be grand. INSTEAD they seem to want to ride out the wave (LOTS OF INVENTORY) to cash in on the few that are willing to pay while they phase it out anyway.

    • Jump

      I would be willing to bet those extra 2 bucks will only stay in your pocket till around this January. Buy Netflix stock!

  • Jump

    Here is what I see – Netflix has recently increased their revenue sources to other countries. It is very cheap to stream video as compared to handling costs of the individual DVDs. By charging more for that service, they not only receive greater revenue but potentially set themselves up nicely to remove the service altogether. By laying off those employees in connection with the DVD handling, they show greater profit for the share holders. Everything in America is now govern by big corporations and the investors bottom line. Sad.

  • http://www.visin.com Tom Townsend

    Its the principle in general – Netlix raising prices in a down economy. Sure $6.00 increase wont break my bank account. But then again, I am getting LESS for MORE. Netflix, it’s time to say adios, you are getting a bit too greedy in my humble opinion. I am voting with my cancellation effective today. Will be interesting to view your next quarterly report…in decline!

  • Alice

    I will be doing some thinking. While six dollars more may not kill me the fact is I go without cable and do not rent a bunch of movies from the video store because I am watching cost. I am going to be honest with Netflix and say the quality of the steaming videos can sometimes be blurry and there are cases of dvds skipping. I may just go with the dvd being mailed to me because I am not happy with the steaming videos that sometimes come in blurry. When you get good steaming videos call me and I will go your route. Until then your idea of making more money is making me think of cutting back instead. If everyone only chooses one or cancle then they will be loosing money.

  • http://www.bestpingpongpaddle.com Jordan Foutz

    Maybe Netflix forgot about a little company called Hollywood Video. If they are so unaware of the current economic climate or so unwilling to recognize that folks out there won’t do this, they’ll suffer the same demise.

  • Chris Tucker

    I don’t need Netflix. Always watch movies for free. Went to the theater with my 3 year old daughter to watch Cars 2 and damn! $30 for movie, pop ($4 for small Mcdonald type size diet coke) and popcorn! Movie was horribly boring. Left in half hour. Never again, unless she forces me to.

  • nicki berger

    Well everyone, try FAMILY VIDEO!! They have the best rental prices, great customer service and have movies the day they come out!! Why pay another one of Netflix’s price hikes for the same crappy service or visit an outdated Redbox when you could go to FAMILY VIDEO!!

  • Mo

    Dear Netflix Support and Service -

    We have not been able to locate a valid email for any one or dept/group at Netflix to send the details below, so we are going to post this wherever we can while we send this in a written letter to Netflix at their corporate offices in Lost Gatos, CA. We are shocked that an online company does not supply any support email, and this shows to be a lack of their customer service. It’s a shame for a company like Netflix to become so greedy. Their competition is, and should be, jumping at the opportunities Netflix’s price increase has created.

    We do LOVE Netflix, and we have been customers of Netflix for along time now. We did expect prices to go up for the steaming w/DVD service, but we NEVER expected the pricing to go up to twice the current price. This is leading us to think of opting to start using a different service (Amazon streaming alone where we can pay per TV episode/season or movie) or use the money to upgrade our cable service.

    We would be happy with a $10 to $12 monthly fee for the unlimited streaming w/DVD service, but I think $15.98 is asking too much.

    How about offering substantial improvements with the streaming service if the price is to increase this much? For example, provide newer and more popular movie releases and premium current TV shows with the streaming service? Then, I could be more comfortable with the price increase to $15.98.

    Meanwhile, the Netflix business model to get its subscriber base up in the early years has proven to be successful. However, based on the price increase notice without offering anything new/improved with the price increase along with an increase of streaming providers (i.e. Apple, Amazon, Hulu, Google, and more) competing for the same customers now, we really think this move is a mistake by Netflix and the current customer base that Netflix has will decrease. Additionally, new customer subscriptions will start to slow down as the word of competing streaming providers spread “mouth-to-mouth” by existing Netflix customers, soon to be ex-Netflix customers, and potential Netflix customers.

    Netflix has had a good set of beginning years. Why kill the momentum now when there are so many very well financed competitors are closing in? Why would Netflix give its current customers a reason to seek other streaming providers?

  • Michael

    When people sign-up for the stream-only service they will soon find out a hard truth: the stream only movie are old [and suck]. However, I found the streaming service was great for my kids while I watched a movie. Block Busters and Red Box are better deals. I will cancel my service.

  • Chris

    Netflix streaming is horrible for movies and ok for tv. If they eventually want to phase out using dvds then why dont they add more movies to streaming? Almost every movie I want to watch is not available on stream. This means a 60 percent increase for me. No thanks, Lost a loyal customer.

  • Alex

    The thing is, when I started using Netflix I decided to go with unlimited streaming and 2 DVDs at a time for $13.99. Later, they raised the price to $14.99 without warning me. Fine. I’ve been paying $14.99 now for a while and it has been worth it to me. But I assume that this new “$7.99 for unlimited DVDs” means one DVD at a time. Therefore, they’re expecting me to pay a dollar more and accept less? Hmmmm…

  • Nyc

    No biggie for me. I only use the service where I get streaming TV shows and Starz movies. Long as they don’t raise that too much, I’m okay with it.

  • gabz

    Dear Idiots,

    If you want to fix your fkuk up, charge folks a flat $20.00 for:

    Unlimited streaming
    Instant New Releases within 2 weeks of movie release date via Stream or dvd by mail
    3 at a time dvd by mail.

    For this, I would pay $20.00 a month.

    Asking me to stream garbage from 1978 for “x” price a month is retarded, take that philosophy back to whatever nationally accredited, community college you earned your “business” degree from.

    I have BEEN cancelled my sub, and have no plans to reinstate as you have cut service + raised prices = 1 pissed off customer….

  • Lysander

    I don’t see the big deal. Why would you want both services anyway?

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