In the News! Netflix to Increase Subscription Fees

12 Jul

A longtime leading giant of movie rentals and streaming, Netflix, has announced a second increase in subscription prices for the year 2011. Vice President of Marketing Jessie Becker made the official announcement on the Netflix.com blog, citing “lowest prices ever” and at the same time slapping his longtime, dedicated customers in their faces. Earlier this year, price increases imposed on all Netflix subscriptions promised the expansion of streaming movie content. The first increase was justified by outrageous demands of movie studio and production company license costs. Customers did not seem very put off by the initial price hikes as long as their services continued to improve.

Five months later, an official blog post revealed removal of member review features, de-personalized the user experience, and introduced the launch of a new website interface. The updated website changes caused an uproar of Netflix blog comments, reaching capacity of over 5,000 dissatisfied customer complaints pleading for the website to be reverted back as the changes were not very user friendly. Despite thousands of objections regarding the new website interface, Netflix ignored their entire customer base, and made no apologies or announcements regarding user concerns. Adding insult to injury, on June 17th Pauline Fischer, VP of Content Acquisition, announced a temporary removal of Sony Movies from streaming service as a result of a “temporary contract issue between Sony and Starz,” and in the following weeks, certain customer favorite shows and movies were slowly removed from instant streaming play right from under user’s noses.

With a good portion of disgruntled and annoyed customers from recent removal of features and content, discussions of alternative streaming and DVD by mail services began to surface. Although Netflix is currently the leader of such services, websites like HuluPlus and Amazon Prime are quickly showing promising potential as substitutions. The downright disregard of customer concerns, coupled with sub-par streaming content, as well as nearly one month delays of brand new DVD release rentals, leaves Netflix with much to be desired for their long-time customers. The majority of users who have not already switched their subscriptions to competitors have rested their Netflix loyalty on the matter of affordability.

Despite the price increase of early 2011, subscription plans which included unlimited streaming of content coupled with pre-selected user preference of DVD rentals per-month have been easy on consumer’s pockets and have been reasonable in price to maintain. Prior to today’s announcement of yet another subscription fee rise, a Netflix customer was able to enjoy unlimited streaming of all available content and an unlimited, one DVD per mailing rental for a monthly fee of $9.99. Prices scaled slightly higher for those who preferred to receive two, three, or more DVD’s at a time, however unlimited streaming was included in all offered packages. Media variety allowed the user the leisure to supplement unavailable streaming content with DVD’s received in their mailboxes, and allowed for uninterrupted entertainment. This type of flexibility and pricing is what attracted many Netflix subscriptions over several years since introducing their streaming service to users.

Today, Tuesday, July 12th, 2011, Marketing VP Jessie Becker posted upcoming changes of Netflix subscription prices which take effect on September 1st 2011 for current and future customers alike. Changes include the division of DVD rental plans and streaming: separately offering unlimited, one DVD per mailing, for $7.99 per month and an option of an extra $7.99 per month for streaming content. The total cost for the current $9.99/month plan therefore increases to $15.98/month, a 50% increase in consumer billing. Customers who wish to opt out of either service can choose to eliminate DVD by mail service and remain with streaming only for $7.99/month, while those who prefer to receive DVD’s only may select plans starting from $7.99 per month, scaling upwards of $43.99 per month to receive 8 DVD’s at a time. Unlimited streaming with DVD rentals, as well as Blu-Ray combinations, begin from $15.98 and end with monthly prices of well above $50.00.

“Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering.” – Jessie Becker

What happens when already dissatisfied customers are greeted with a second price increase of over 50% in a period of less than one year? Well for one, numerous, frustrated customer feedback. Less than 12 hours after the initial announcement on the official Netflix blog, user comments have reached capacity of 5,000. Over 3,000 Twitter responses, more than 20,000 user comments on Netflix’s Facebook “Fan” page announcement status, and a rapidly overflowing volume of comments directly on their Facebook fan page. Since early afternoon, users have reported being unable to reach customer support phone lines due to “high call volume.” Nationwide, customers feel they have been hit directly below the belt.

With prices increasing hastily on virtually all utilities and services around the United States and consumer wages remaining stagnant, disposable income spending has reached an all-time low. Consumers have relied on reasonably priced services such as Netflix solely for their value, a “bang for your buck” type of deal. Today’s announcement may have changed the future of Netflix greatly, as continuous promises of account cancellations are echoing throughout social media outlets and all over the web. Don’t agree with the new changes? Tell Netflix directly. Call their customer service line 1-866-716-0414, email publicrelations@netflix.co​m, go to the Netflix Underground blog for in depth contact options, or use any relevant social media links found within this text.

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5 Responses to “In the News! Netflix to Increase Subscription Fees”

  1. кран балка July 13, 2011 at 2:45 am #

    Разместил это на своем блоге с ссылкой на ваш сайт. Надеюсь, Вам это какую-нибудь пользу принесет

  2. j.p. July 13, 2011 at 12:56 pm #

    I got an e-mail this morning from Netflix casually saying:
    —————————————————————————————————-
    Dear Jenny,

    We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

    Your current $17.99 a month membership for unlimited streaming and unlimited DVDs (including Blu-ray access) will be split into 2 distinct plans:

    Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
    Plan 2: Unlimited DVDs (including Blu-ray), 2 out at-a-time (no streaming)
    for $14.99 a month

    Your price for getting both of these plans will be $22.98 a month ($7.99 + $14.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

    These prices will start for charges on or after September 1, 2011.

    You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the Plan Change page in Your Account.

    We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

    –The Netflix Team
    —————————————————————————————————-

    Bascially, they will automatically assume that I am willing to accept these new fees and if not I have to manually change everything… what am I am an elderly person who deletes all my e-mails? I think they have lost their minds if they think people are going to pay extra for “Watch Now!” when the selections are about as small as McDonalds healthy food choices. Not to mention most of their movies BIG HITS!…from 1980.

    I am so angry about this…

    • muffinplop July 13, 2011 at 6:34 pm #

      I’m mad too, I’ve been complaining about them for weeks now, their selection is horrific and I find myself scrolling for hours trying to find something to watch, especially after the new layout last month. Then you find something good to watch and 10 mins into the movie or show you get a buffering message. Gotta reset the device in order for NF to continue playing your content.. and it was suggested that our connection is at fault. No, no it isn’t. We pay extra for a higher connection capacity. Oh, isn’t it particularly nice when a series has episodes split between streaming and DVD only? Ep 1-9 streaming, Ep 10-12 DISC ONLY, Ep 13-26 streaming. This is exactly why I needed a DVD included in my plan, because they refuse to fill the missing episodes for streams. The AUDACITY of NF asking for an extra $7.99 for content which they have promised will be provided as a result of the previous $2 increase. Its also very convenient that this announcement was made several days after billing cycles began. I’ve just payed for my month 4 days prior and refuse to cancel and have them keep my $10.88. I’m forced to wait until next bill in early Aug. in order to demonstrate where they can shove it.

  3. j.p. July 13, 2011 at 7:02 pm #

    NOT to mention the fact that netflix stopped working on my PS3 for the last 2 months and they keep telling me to ‘reconnect it’ and I do and, nothing.

  4. jasons132j August 4, 2011 at 8:17 pm #

    As is with everything these days it seems, they want us to pay more and get less. They most likely are pushing the streaming side, but then watch people start going over their broadband cap, and getting charged for that, and spending even more. I mean 50-60% increase? If gas jumped up like that their would be uproar, and its rightly so there is uproar about this. Blockbuster has been rather active in trying to suck up some of the expected 2.5 million people that will cancel in September, offering 30 days free and great prices. Actually I think Netflix just made that market a lot more competitive, all the other services are going to pick away at netflix subscriber base, and its #1 spot. Working at DISH I read all the press releases from Blockbuster, and even with DISH subscribers they are offering a great 3 month free deal for blockbuster by mail. You can check it out at http://bit.ly/m8kwjf

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