A month ago Netflix sent an e-mail to all their subscribers that there was an upcoming strategy to change the price of their services and eliminate the most popular choice for its customers. Netflix's strategy was to cut out their 1-DVD at home and unlimited "watch instantly" plan and make them 2 separate choices, consequently raising the price by 60% for those who keep the plan they've grown accustomed to paying for.
I was pretty upset because I was paying just $10 a month for my movie rental plan, and if I wanted to keep the same plan then it would now cost me $16. Now $6 is not a lot of money, but that is $6 extra on top of what I was paying before. Over the next year my Netflix's membership will cost me $192 (plus taxes), $72 more than what the original $120 (plus taxes of course) membership cost me. No additional content, no additional services, just the same finished product but a 60% hike. What are you thinking Netflix?
A spokesperson replied to this question, "...this split will help us make our services better for subscribers and shareholders for years to come." In an economy where countless people are unemployed and/or in debt, a 60% hike in membership price doesn't seem beneficial for the subscribers, but it definitely benefits the stockholders. Netflix has flourished in the last 3 years, gaining over 24 million members total since the company began. It's not hard to imagine the profit they can make on an increase in membership price on 24 million customers (times whatever increase in $ by 24 million). This is the definition of taking advantage of a customer and corporate greed.
An announcement came out on September 1st, that Netflix will lose Starz Entertainment in February 2012. For Netflix members, Starz provides most of the new watch instantly movies that are available. With this contract ending between the 2 companies, it will have a negative impact (less new movies and more B rated movies) for those who buy into the watch instantly service Netflix offers. What are you thinking Netflix? How are these changes helping or enhancing the customers services you have to offer? It seems like the monopoly Netflix has had on streaming entertainment is coming to an end and their trying to squeeze every penny out of our pockets before they have to completely change their business.
On the bright side of things, Netflix stocks plummeted 39.46 points today (a whopping 18.91%) in just one day (Sept 15). The company also lost 1 million subscribers in just 1 month since their "plan strategy to enhance the customer and stockholder's services for years to come". What are you thinking Netflix? Why did you have to mess with a good thing.
Well said Daniel!
ReplyDeleteI've been a Netflix member for over 3 years (with the $10 plan), and i'm pretty upset too with the insane price increase. I can understand a dollar or two, but 60%! It shows how out of touch they are. Losing Starz is huge, and I doubt i'll continue my membership past this year unless they get their shit together. Hopefully today's news will scare them into a more fair price range or much better content.
ReplyDeleteIn the stock market today, Netflix dropped another 13.97 points (8.25%). Was this part of their strategic planning? Only time will tell. I'm okay with paying a little more for a service but Netflix took the risk to hook us into a price gouge that's just doesn't make sense.
ReplyDeleteWOW!!! Netflix is actually breaking apart to 2 separate companies. Netflix and Qwikster. While they alienate more customers, I'll check their stocks for today Mon, 9/19. Down 11.44 (7.37%). So since I wrote this first post Netflix has dropped from 208.62 to 143.75 (a whopping 31.1%). A great business model you got there Netflix.
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