Lots of Whining over Netflix’s Price Hikes; Is It Really All That Bad?


netflix disc free on nintendo wii

Guys, guys… settle down. Netflix price hikes aren’t as bad as everyone is making them out to be. Sure, $9.99 for unlimited streaming + 1 DVD out a time was nice while it lasted, but $15.98 isn’t that bad. If one compares it to Blockbuster by Mail, Netflix’s offering is still a heck of a deal. Don’t believe me… lets compare.

Netflix’s New Pricing:

$7.99 for unlimited streaming; $7.99 for 1 DVD out at a time – together: $15.98

Blockuster’s Pricing:

$11.99 for 1 DVD out a time; $16.99 for 2 DVDs out at time — note: unlimited streaming for a flat rate isn’t an option (but you do get 5 free in-store exchanges)

*** The tables have turned (7/14/2011)! Blockbuster has just launched a promo to get Netflix’s disgruntled subscribers with a $9.99/mo 1 disc at a time, unlimited in-store exchange plan. ***

I don’t know about you, but I’d rather have Netflix’s combined offering — with all the cross-platform flexibility it offers — for $15.98 over Blockbuster’s 2 DVDs out at a time plan for $16.99. Now the question is: Will Netflix cave under all the pressure they’re getting for raising the price $6? Time will tell. Either way Netflix subscribers are still coming out on top when compared to the competition.

UPDATE 1: Turns out the new price hikes also brought in more content online from NBC/Universal. ZDNet also provides a few reasons why Netflix and others had/will be raising their service prices. One analyst estimates Netflix’s content costs could balloon from $180 million in 2010 to $1.98 billion in 2012.

UPDATE 2: Want to make sure you’re getting the most bang for your buck? Check out FeedFliks.com for your Netflix usage breakdown. [via]

UPDATE 3: Just wanted to provide a few points that came up in the discussion — not to be insensitive – that should be taken into account after the reality of the situation has set in…

  • Netflix is a for profit company looking out for its bottom line
  • Netflix is large enough now that they don’t have to give long-term subscribers preferential treatment (a new subscriber is just around the corner)
  • Netflix’s streaming service is no longer a “perk” [NEW DATA]. It’s the company’s future that they are heavily investing in here, in the U.S., and abroad (Netflix’s expansion into Latin America and Europe is/will be streaming-only)




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Filed in: Content Providers, Industry Buzz


  • http://twitter.com/durpa Jeb Durpa

    more than 50% increase no new value, pretty simple to see why people feel ticked.  I’m sure inertia will keep most people form leaving, but it is a major (as a percentage) cost increase that doesn’t cite costs to do business, acknowledge customers that have been loyal over the last several years, nor does it give us any new benefits.  In short the people that found it convenient, but didn’t use it that often got a reason to cancel it and use the other now just as convenient alternatives.

  • http://twitter.com/durpa Jeb Durpa

    more than 50% increase no new value, pretty simple to see why people feel ticked.  I’m sure inertia will keep most people form leaving, but it is a major (as a percentage) cost increase that doesn’t cite costs to do business, acknowledge customers that have been loyal over the last several years, nor does it give us any new benefits.  In short the people that found it convenient, but didn’t use it that often got a reason to cancel it and use the other now just as convenient alternatives.

  • http://twitter.com/agrundner Alexander Grundner

    In these days of costs going up to do business, is it really all that surprising? Netflix is a for profit company like any other that has to answer to its stock holders. I agree that it’s a shame that long-time subscribers are feeling the pinch the most, but I’m sure they knew at some point the piper was going to come calling and bring everyone up to a level playing field.

  • http://twitter.com/benmetzler benmetzler

    If the cable company came to you and said “we charged you $100 for unlimited HD and SD channels, but now we are going to offer you a better deal of $75 for SD or $75 for HD, and a combined offer of both for $150.  Oh, and we’re not adding anything.  We’re still less expensive the satellite” would you consider it “not so bad”?  Netflix may be less expensive then Blockbuster, but that doesn’t mean they can just dramatically raise the prices and not expect people to be upset.

    Netflix had a decent streaming selection, an incredible disc selection, and a great price bundle.  Now they only have the first two.

    Ben

  • http://twitter.com/benmetzler benmetzler

    In both the case of Comcast and Public Storage, were you happy with the increase?  It’s the exact same thing with Netflix.  People aren’t happy with it and are complaining.  Whether Netflix will listen or care is TBD.  But if you go with the Netflix/Redbox option, you’re just encouraging Netflix’s actions.  It’s easier and less expensive (from what I’ve read) for them to stream then ship discs.  Unless you use your money to condemn their actions, they will continue to raise rates if the cost-benefit is there just like the cable companies.
    Ben

  • http://twitter.com/agrundner Alexander Grundner

    To answer your question, heck no! I was bitter, sure, for a few days, but when there aren’t better options available (be it service availability or price) what can you do? I agree with the principle of voting with your wallet. It just turns out that, in this case, Netflix is still the better option when compared to competition.

  • http://twitter.com/agrundner Alexander Grundner

    This happens all the time. Funny that you bring up television service because Comcast has done similar things to its customers. On a related note, I recently got a postcard in the mail from Public Storage stating they were going to raise my bill $15 month in order to provide better service! I called in to complain, but that didn’t get me anywhere :D

    Bottom line: All we can do is compare our options when something like this happens and make a call on what to do. Obviously, Blockbuster isn’t the direction to take. Perhaps, Netflix streaming + Redbox may be the way to go for inexpensive access to DVDs?

  • Anonymous

    why not pay $10 per gallon for gas and the have it go up to $16 per gallon of gas for 100% exactly the same product.

    as stupid questions and get stupid answers.

    the greedy, greedy content providers are like leeches on our skin

    instead of bleeding the poor western consumers , expand into china and get that price down to $1.99 a month or less by subscribing over 100million Chinese!

    I knew this was going to happen as Netflix announced it’s expansion worldwide, this allowed them to standardize product and pricing and get out of the pesky physical media business.

    PS netflix your online choices SUCK!!! been waiting for years for you to add what is now on HULU PLUS…

    You just opened the door to directtv whihc own blockbusters and red box will eat into that business.

    Netflix remember we are all paying $60 a month delvery costs for internet already and bandwidth restrictions on our end, have a heart!

  • Anonymous

    wow your affected!!! You must be one of those who enjoy an $8 starbucks when you could buy a entire can of coffee for the same price of one cup!

  • Anonymous

    they have funnily enough! just over a much longer period of time, I would say 3 or 4 years prices have gone from $70 a month to $120+

  • http://twitter.com/agrundner Alexander Grundner

    Nope. I’m not that guy.

  • http://twitter.com/agrundner Alexander Grundner

    OK, how about having to pay $4.15 a gallon when you were only paying $3.25 a year or so ago? That’s the world we live in today. Like I said previously… I believe in voting with your wallet, but if better options aren’t available what can you do? Either stick with it, drop it, or replace it.

  • Anonymous

    I have netflix myself and am thinking about cancelling as well. The streaming is not all that great, but it was something that they had to make them stand out from blockbuster… Knowing that if I wanted I could go online and stream a movie. Now that I have to choose or pay extra for the service I may as well go to blockbuster who allows me to walk in one of their stores and exchange my movies. Yes it is about $2 dollars more but when comparing it now, I will get more bang for my buck with blockbuster. I do believe that netflix made a huge mistake with such a drastic change. I was a customer for over 4 years and I am definitely switching….

  • Anonymous

    Alexander I would like to disagree with that, because their streaming is not all that great…The movies are there for months before they are updated…The selection is not all that great…At least with blockbuster you can go to a store and exchange your movies for another and have a wider selection then what is being offered during streaming. Also with netflix I used to get my movies a day after it had been shipped now it takes 2 to 3 days, so not much of good service if you ask me.

  • http://pulse.yahoo.com/_T4REEZMGWP7OEGFCGZLERNDLKM Jason

    ..wow this article is complete trash lol; U sound like a netflix employee…
    Netflix is going backwards and ignoring the user base as usual.

    Streaming for the most part was considered a perk for many…U do realize 80% of what they stream is free on other media sits like Crackle etc…

    Price is no big deal? Its 60% increase… Its double the amount to fork over. They pulled in over half their members from good pricing from the last change…now they are pulling a 180 on all those subs… *scratches head

    Tac this on to their recent screw over of pc users with the new interface on the sight and bye bye.

    This will not help bring in new source in the long run it will only push people to others.

  • http://twitter.com/agrundner Alexander Grundner

    It’s understandable longtime subscribers would be upset. No one like price hikes. I’m looking at from the outside as a non-subscriber looking at what’s being offered NOW and what’s out there. Now, if I had to choose between Netflix’s current rates and Blockbuster’s new promo, I’d go with Blockbuster (but I’m sure that deal won’t last long). Some of my friends have already done it. Everyone has to remember that Netflix is a FOR PROFIT company. Not a *thank you for being with us this long* type of company that will be happy to take a loss to keep certain folks around. The reality is… the people that feel crossed by Netflix will be replaced by the next person that signs up.

    Oh, and one last thing. Streaming for Netflix is no longer a “perk”. It’s the future they’re investing in. All the new markets they’re expanding to is streaming-only.