After Upping Pricing Plan, Netflix Wonders Where The Haters Are

Gimme my Netflix! (Photo by _tar0_ via Flickr)

So are haters not hatin' enough? When California-based rental and streaming hub Netflix announced upcoming pricing plan changes, investors were delighted, while consumers were irate. Under the new plans, subscribers who now want to get discs by mail and access content online for streaming will have to purchase two plans for a combined cost that reflects a 60% price increase from what they currently pay for the same services.

On Twitter, and in comments sections all over the very internet tubes on which they view their TV shows and movies through the service, users proclaimed this was the tipping point that was inspiring them to cancel their memberships. A "#dearnetflix" hashtag sprung up on Twitter for everyone bitching about the price hike.

But Netflix CEO Reed Hastings revealed yesterday that he was surprised people didn't bitch more. All Things D explains:

“Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers,” Hastings said on yesterday’s earnings call, answering a question about the outpouring of outrage on the Web. “We knew what we were getting into, we tried to be as straightforward as we could, and that has worked out very well for us.”

Netflix also knows that subscriber growth is going to go a little flat when the new pricing plans force current subscribers to, well, pony up, lose one of their viewing options, or take a hike altogether. It's still not really bad news for the business, since so many people seem to be staying on to stream reruns of the "Cosby Show" and obscure anime while getting their oft-mangled discs in the mail.

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By Lindsay William-Ross in Arts & Events on July 26, 2011 10:40 AM

Comments [rss]

ijus

More money for less service.
How can this be a benefit, except the investers...if THEY stay.
Watch the market!

Ed Yerke-Robins

"More money for less service?" At the risk of dating myself, I remember when Netflix was $20/month for DVDs only (& we had to walk uphill both ways to reach the mailbox). $15 for UNLIMITED access to DVD & streaming is still a bargain in my book. (Then again, they don't stock what I'm into at Redbox.)

Artificially low prices (the sort that existed under the $9.99/month plan) are unsustainable. People really need to relax on this. Would you rather Netflix lose content because they can't afford the increased licenses any more?

lucytwoshoes

I'm dropping down once the prices change in September. I did plenty of bitching off the internet about it and looked into other options. I will be decreasing my membership to one that is cheaper. I wonder if their predicted estimates of bitching is equal to their estimates of how many people will drop/reduce service? That will be the more important measure, right?

Will Campbell

I didn't bitch, I opted to calmly reduce my plan so that I was getting less but Netflix wasn't getting any more money from me. I'm now at the two-disc level and no more Blu-Rays.

Paul

Too early - the prices don't start until September, giving people an extra month of streaming/discs at the current rates. Unless you had an alternate solution, there really isn't any reason to cancel your subscription *right* now.