Ah, Netflix, Wherefore Art Thou So Greedy?
In an announcement made on Tuesday, Netflix stated that they would be raising prices for current customers. The e-mails hit the streets and the news about a rate fee hike by the movie distribution firm was all the rage, literally.
In fact, rage might be an understatement. As of this writing, the Netflix Facebook page has over 1.5 million people who “Like” the service. In the post that was distributed at 12:22 p.m., on Tuesday, the company announced the plan for the rate hike. At its core, the plan involves splitting the streaming video service from the DVD mailing service, for which the company is most well known for. In addition, the cost of streaming alone, or 1 DVD a month, is now near the same price as both services were when they were combined.
The notice did not go unnoticed by Netflix fans. Over 50,000 people commented on the plan. Let’s just say that the rate hike was not well received. “You suck,” “Fire whoever came up with this idea ASAP!” and some other, more colorful, comments were posted.
But the timing and type of hikes puts families into a real bind. With the economy showing signs of just chugging along at a snail’s pace, families are looking to cut costs wherever possible. Netflix has long been one of those options. It had been possible to go light on the cable bill in lieu of using Netflix’s service. Access to new movies via DVD and the option to stream typically slightly older movies and T.V. shows allowed flexibility for families not available via broadcast television.
The rate hike, though, is significant. With the Blu-Ray option, unlimited streaming and one Blu-Ray disc out at a time, the cost of the service ran at $11.99, according to Netflix’s site (and also my billing statement). According to the message released by Netflix, this same setup will cost $17.98, and both service prices are without applicable taxes. This is a 50% increase without any news of improved quality, additions to the streaming library or other enhancements.
Families must now look to their budgets and make a choice: Programming flexibility or by-mail DVDs. Families might look to Netflix for strictly streaming and turn to alternatives, like Red Box, to fill any DVD needs. It might be what Netflix is hoping for, as a reduced DVD infrastructure may help the company reduce overhead spending, just as Netflix had been helping families reduce overhead spending.