Sunday, July 17, 2011

Netflix Price Increase - What Do You Think?

Wow what a way to run off customers! 

Tuesday Netflix sent out an email saying they are increasing their rates as of September 1st.

Currently I have a plan that allows me 1 DVD rental and unlimited streaming for $9.99 a month. They are changing the structure of their pricing so as of September first, I would have to pay $7.99 for 1 DVD at a time and an additional $7.99 for the unlimited streaming. So the new rate is $15.98, which is a 60% rate hike.

If you go with the 1-DVD a month deal and you watch the movie the same day you get it, and return it the next day you are looking at about 8 movie rentals a month. If you go with the streaming video you pretty much have unlimited movie watching at your finger tips. The downside to Netflix's streaming is the new releases usually aren't streamed right away and all movies are not available all the time on streaming. Netflix has control over which movies are available on streaming and change them quite frequently.

Now granted $16 isn't a lot of money. It's the same cost as a couple of lattes a month. I've heard of a lot of people that have given up their daily latte's to cut back and save.

The honest truth, I don't even pay for my Netflix account it is a gift from my darling son. :) So the price increase doesn't actually affect my pocket book at all. It's just a matter of principle with me. Why does Netflix think they can take advantage of people like this? 

Last year the rate was $8.99. In January of this year they raised the price to $9.99. So it's not even like they haven't had a price increase in a while.

In today's economy how many people do you think are going to go for this deal? I know of three other households that are dropping the DVD plan and just going with the streaming. Initially this was my first thought as well, but the more I think about it, the more I'm inclined to just cancel Netflix all together.

On one hand I feel like I would be returning a gift from my son by cancelling Netflix. On the other hand I don't like people taking advantage of others, and I know he get's what I'm saying here.

The bottom of the email Netflix sent out says "We realize you have many choices for home entertainment, and we thank you for your business." Yep, they are right I have cable with many channels, including Showtime, The Movie Channel, Encore and the cable companies free movies on demand. I probably left some premium channels out. The point being I do have many choices, also why I never subscribed to Netflix myself.

Now having used Netflix I must say I enjoy it and I have recommended it to many others. That certainly won't be happening again anytime soon. It's much easier to navigate the Netflix site than it is to navigate the cable guide if you are in the mood for a specific type of movie.

While sitting here typing this I'm thinking, I watch the instant play movies on my Wii. I could just play the Wii instead of watching a movie. I hardly ever have time to play games. Maybe cancelling the Netflix account would allow me more game time.

Netflix put the announcement of the change on their Facebook page on Thursday. They are calling it a separation of accounts. I just looked and that one post has just rolled over 74,000 comments. I didn't go through all of the comments, but I didn't see anyone happy on there. One person even reminded everyone their local library has a very nice DVD collection. I always forget about that, another good idea.

So what do you think? Is Netflix justified in this increase in some way I can't think of? Or are they just being greedy as so many other companies are doing now a days?

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