Netflix has really screwed the pooch this time. In a strange, ham-handed move, they introduced a 60% immediate price increase by email and blog post. The reaction was, not surprisingly, overwhelmingly negative.
In a New York Times blog post Thursday, David Pogue tried to make sense of the sudden price increase (Why Netflix Raised Its Prices). In a phone interview with a spokesman for Netflix, Pogue was able to learn this 4 point rationale:
* Six years ago, the “one DVD at a time” plan (no streaming) was $10 a month. Four years ago, it was $9. Today, it’s $8. So if you’re interested in DVDs only, Netflix’s new price is actually the lowest it’s ever been.
* The price for unlimited streaming (no DVD rentals) hasn’t changed. It’s still $8 a month.
* The only prices that have gone up are the DVD plus streaming plans. For one DVD at a time, that’s gone from $10 to $16 a month. (For two DVDs at a time plus streaming, it’s now $20 a month.)
* Netflix knew that there would be a nasty backlash, and has already taken the subscriber defection into account in its financial forecasts. It still figures it will come out ahead. (I found this part a little creepy.)
The comments on Pogue’s post are mixed. Some see this as a slap in the face to a loyal customer base. Others don’t see the big deal in a $6 increase.
The big deal is the attitude. The total disregard for their customers. Sure, Netflix is a business and they’re concerned with making money. But 8 months ago, they thought they could make money at a $10 price point for a DVD / Streaming combo service. The truth is: they know that they still can and this move smacks of pure, unadulterated greed.
Unless I’m misinterpreting their explanation, what Netflix is saying is: “We just figured out that we can actually take more money from you without providing any additional value. We know that it’s going to piss off a lot of you, but, as long as that number is less than half of our subscriber base for this particular service, we’re going to make more money. So fuck you all.”
It’s the attitude that’s so unpalatable. The unmitigated gall of such a shameless money grab.
Come September 1, when this price increase rolls out for existing customers, I will be cancelling my Netflix subscription. Not because I can’t afford an additional six bucks a month, but because it’s such a blatant dick move. There are too many free entertainment options on the Internet, to allow Netflix to take more money just because they think they can.
In a New York Times blog post Thursday, David Pogue tried to make sense of the sudden price increase (Why Netflix Raised Its Prices). In a phone interview with a spokesman for Netflix, Pogue was able to learn this 4 point rationale:
* Six years ago, the “one DVD at a time” plan (no streaming) was $10 a month. Four years ago, it was $9. Today, it’s $8. So if you’re interested in DVDs only, Netflix’s new price is actually the lowest it’s ever been.
* The price for unlimited streaming (no DVD rentals) hasn’t changed. It’s still $8 a month.
* The only prices that have gone up are the DVD plus streaming plans. For one DVD at a time, that’s gone from $10 to $16 a month. (For two DVDs at a time plus streaming, it’s now $20 a month.)
* Netflix knew that there would be a nasty backlash, and has already taken the subscriber defection into account in its financial forecasts. It still figures it will come out ahead. (I found this part a little creepy.)
The comments on Pogue’s post are mixed. Some see this as a slap in the face to a loyal customer base. Others don’t see the big deal in a $6 increase.
The big deal is the attitude. The total disregard for their customers. Sure, Netflix is a business and they’re concerned with making money. But 8 months ago, they thought they could make money at a $10 price point for a DVD / Streaming combo service. The truth is: they know that they still can and this move smacks of pure, unadulterated greed.
Unless I’m misinterpreting their explanation, what Netflix is saying is: “We just figured out that we can actually take more money from you without providing any additional value. We know that it’s going to piss off a lot of you, but, as long as that number is less than half of our subscriber base for this particular service, we’re going to make more money. So fuck you all.”
It’s the attitude that’s so unpalatable. The unmitigated gall of such a shameless money grab.
Come September 1, when this price increase rolls out for existing customers, I will be cancelling my Netflix subscription. Not because I can’t afford an additional six bucks a month, but because it’s such a blatant dick move. There are too many free entertainment options on the Internet, to allow Netflix to take more money just because they think they can.
3 comments:
Yes. A boycott is in order. I agree.
Apparently the backlash to their pricing increase has been more substantial than they anticipated.
So their idea for fixing this debacle is to rebrand the DVD service and separate it from their streaming service altogether? Seriously? That just complicates the process for customers who elected to remain with them. If they were looking for a way to further alienate their subscribers, they certainly found it. Just look at the comments on this blog post from Sunday (http://blog.netflix.com/2011/09/explanation-and-some-reflections.html) if you have any doubt.
It's not every day that you see a company this successful shoot themselves so deftly in the foot. They can dress up this turd and paint a big smiley face on it... but it's still a turd. Reed Hastings has compounded the fuck-up rather than fix it. From here on out he may just be rearranging deck chairs on The Titanic.
Well, I was gonna switch over from my Blockbuster Online account to Netflix because I hate Dish Network with a passion usually reserved for skumbag musician ex-boyfriends/ex-husbands, (and they recently bought Blockbuster) but after hearing this I may just start buying the damn things and drop the subscription - when you can get most DVD's for 3-5 bucks at discount houses, is it really worth it to pay double?
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