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Customers Drop Netflix Prices Rise 63% in Movie Streaming Rates Increase

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by hearit

hearit's picture
In The News

Netflix customers are irate as prices rise yet again: Netflix price boosts will increase the dvd service's $9.99 per month plan to $15.98--in about a 63% pricing increase for movie customers. It's an email notification that hasn't gone out to consumers, as many plan to drop the service over an announcement of plans to charge customers an extra $7.99 per month for once-free movie streaming services. It's all coming in September 2011 to a bill near you.
The problem appears to begin with a serious lack of competition -- or at least that's how Netflix seems to perceive the situation. With Blockbuster in bankruptcy, Netflix seems to think it has the lead on charges whatever pricing it chooses. But many customers have already either dropped down plans -- or dropped the movie service altogether. Even Time Warner, one of the most hated service companies among consumers for its lack o service and reliability, is looking better with on-demand services than the monthly rental company.
This Netflix price increase is one in a series of recent boosts from the movie service provider in just recent times: The September 2011 increases mark the third major increased cost to Netflix customers in just two and one-half years -- and customers are already enraged over the leaked announcement of slated price changes to begin September 1.
Netflix just recently popped customers with huge price increases in December 2011. But before that price increase, the movie provider hit customers who prefer Blu-Ray disks with unexpected pricing changes in Spring 2009.
It was a very misleading move: The movie service company first offered the new Blu-Ray technology for $0.99 cents per disk -- but, right after customers became used to the flat-rate pricing and adopted the use of Blu-Rays over DVDs in shipments, Netflix quickly changed pricing. Customers saw a huge increase when -- only months prior, during the holiday and Christmas seasons -- Netflix had heavily marketed its newer streaming movie technology and services. The movie provider had even been pumping technology ads for an LG Blu-ray player, used specifically with Netflix services. That Blu-Ray player became a popular gift for holiday recipients and new customers who signed up for the Netflix service during those holiday months, only to have the company suddenly boost prices significantly, just one season later.
The March 2009 increase saw Netflix raise Blu-Ray movie rates from its $0.99 cent flat rate with a new surcharge that equaled to up to 10 times that monthly fee depending on individual customer plans. Just months prior, the Netflix monthly surcharge for Blu-Ray movie titles had been a flat rate of less than one dollar per month -- $0.99 cents per title, regardless of Netflix plan. By Spring’s end, Netflix had suddenly changed that flat rate to a variable rate for Blu-Rays -- a surcharge per month that was huge for some accounts and, at best, substantial for most.
Netflix gave customers the excuse via email that, “Our Blu-ray selection has grown more than 60% in just 6 months to over 1,300 titles, and is continuing to expand quickly. Blu-ray adoption among our members has also grown – it’s now close to 10%... Blu-ray discs are substantially more expensive than standard definition DVDs – often as much as 30% more.” Interestingly, it was Netflix itself that prompted that "adoption" by pushing Blu-Ray availability to customers -- and garnering new customers through the flat rate fee it was offering for those titles. But it wasn't long before the movie company was blaming customers themselves for the price increases the company levied across the board. After Netflix got customers interested in the Blu-Ray technology and pushed its flat fee of less than a buck, some customers saw a monthly increase of up to $9 extra per month for the Blu-Ray option: It was a sneaky deal considering that many customers actually purchased Blu-Ray players compatible with Netflix just months prior.
In Spring 2009, Netflix customers saw their plans go up by at least $4 per month and up to $10 additional per month -- from $1 per month -- all for simply choosing the Blu-Ray technology that had been so adamantly pushed by the service company.
There was also speculation that the March 2009 Netflix price increases for Blu-Rays were due to disk cracking that was commonly reported. While few customers complained previously of DVDs from Netflix arriving to their homes cracked, it appeared the Blu-Ray disks may have been more fragile than anticipated: complaints were bountiful, that customers were frequently receiving cracked Blu-Ray disks in the mail.
Only about half a year ago -- in November 2010 -- before this price increase announcement for September, Netflix increased prices by $1 per month on its two most popular unlimited monthly plans that respectively offer 1 DVD out at a time (raised to $8.99 per month from $7.99) or 2 DVDs out at a time (raised to $14.99 per month from $13.99) . But that dollar increase isn't what made customers beyond angry.
Netflix saw flaming mad customers in November 2010 when the movie company again changed monthly pricing and put huge increases into effect on every plan that offered between 3 DVDs to 8 DVDs per month: Those monthly plans saw November price raises between $4 dollars to $8 dollars per month in boosts.
The new, planned Netflix price increases for September come as a slap in the face to customers -- many of whom originally signed up for the movie service through its free trial offer that was once a month long, now limited to just two weeks or 14 days.
The new, September 1, 2011 pricing will include a $7.99 price per month for one DVD rental at a time or to two DVDs at a time for $11.99 per month. But the big whammy is coming in the form of streaming services -- a service which the company has used to grab new customers by pushing the fact that streaming services were free. Streaming movies won't be free any longer -- not by a big shot. The service wants to charge customers an additional $7.99 per month -- on top of regular monthly service plan charges -- to use the streaming services that were once free.
Every Netflix customer will now have to pay an extra monthly fee to keep using the movie provider's streaming movies service. And many estimate Netflix is going to lose huge in this deal: Customers are already talking about scratching the company that gained new customers -- and additionally got them to purchase the needed equipment for streaming. Until now, customers who had invested in that pricey equipment had tried to cut losses by simply keeping the Netflix service in efforts to balance out costs of Blu-Ray players for streaming and other tech purchases to help with streaming.
The movie company seems to claim price boosts are all in the interest of the consumer. It sounds good on paper: "Separating unlimited DVDs by mail and unlimited streaming into separate plans to better reflect the costs of each and to give our members a choice: a streaming only plan, a DVD only plan or the option to subscribe to both.” What it really means: we're yanking the free streaming service that we marketed to customers like crazy, to get them into the movie service in the first place.
Comment at Wacktrap -- or add your own wack story about the movie provider -- to tell Netflix how much you oppose plan changes and its planned rate increases. Make it clear to Netflix, now, how you feel -- to make a change before its plan goes into effect.


Netflix Inc
100 Winchester Circle
Los Gatos, CA 95032
United States
Phone: 1-408-540-3700
37° 15' 34.524" N, 121° 57' 45.5256" W
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