Netflix Causes Customer Outrage Because of Rate Hikes
Netflix's Tuesday announcement of a rate hike on it's services has caused a customer backlash. Many customers have left around sixty thousand comments on the blog and also on Facebook. @Netflix Twitter has also seen a flood of tweets in response to the price changes.
So what has changed? Netflix was originally $9.99 per month to have 1 DVD out at a time and also unlimited streaming of videos on the web, XBox, and other various networks. The new change divides up the prices. It will cost $7.99 a month for our 1 DVD out at-a-time plan and then an additional $7.99 a month for Unlimited Streaming(no DVDs), according to the Netflix blog.
Facebook currently has 60k+ in comments with most being negative on the price hike. Most are upset that existing customers were not notified in a timely manner and the lack of streaming media content. Most argue that the majority of top watched movies and TV series are only available on DVD only.
This price change really shows how social media and customer service are working hand in hand. There has not been a response by Netflix on the price change. Many other services similar to Netflix are utilizing this to gain customers from Netflix. Blockbuster released a press release today offering discounts to customers that switch to Blockbuster along with a variety of other promotions.
One thing is clear, Netflix customers are unhappy about this price change. The change officially goes into effect September 1, 2011 for existing customers and they are sure to see a large loss of customer base. In my opinion, the best option for Netflix is to do cleanup and revert back to the old pricing. If they don't do this they will see that the price change (approximately 60%) will end up in a greater loss in the large number of customers canceling service.
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