Netflix Price Increase Outrages Current Subscribers

Posted by on July 15th, 2011   Filed under: Industry News, Technology
Source: Netflix Blog

It wasn’t long ago that Netflix seemed to be on top of the world with an endless stream of new subscribers and plenty of content providers signing very favourable deals with them. However, things have been getting a little bit more difficult for the company as of late, as many studios are now contemplating their own digital movie services and competitors like Hulu are making some big moves of their own. The situation has forced Netflix to make a tough decision this month: they have restructured their subscription plans in the U.S. by dividing streaming and DVD by mail services into two separate packages. The end result of this is that many current subscribers will see a 60% price increase if they want to have access to both the Watch Instantly catalogue and physical DVD rentals. Needless to say, a lot of consumers feel blindsided, and have been expressing their disappointment across the web.

On Tuesday, Netflix announced via their official blog that instead of paying $9.99 a month for both unlimited streaming and DVDs, customers would have to choose between $7.99 a month for unlimited streaming and $7.99 a month for unlimited DVD rentals. Either that, or pay $16 a month for both. The changes are effective immediately for new subscribers, and existing customers will switch over by September 1st. The post announcing these changes now has over 11,000 comments on it, many of them expressing anger and outrage.

It’s pretty clear that Netflix is looking to slowly phase out DVD rentals by mail altogether because of the overhead costs associated with it. However, they know that many of their members will be very slow to switch over to a streaming only option, so they are trying to give them a push in the right direction. Unfortunately, they probably didn’t anticipate that so many people would still really want both options, and it has turned into a bit of a P.R. nightmare for them. Deadline is reporting that Netflix shares were down 4.1% on Wall Street yesterday, and now Blockbuster is trying to lure unhappy customers over with a free one month trial of their Total Access service.

What do you think, did Netflix make a big mistake here? If you are a current Netflix subscriber, will you stay with them and if so, what plan will you choose?



  • Matt

    It’s kind of shitty. Luckily I only have the streaming service so it doesn’t effect me.

  • bard

    The original $9.99 price for that plan was too good to be true, and I’m just glad that I got to use it for as long as I did. I don’t think I’ll be changing my plan, but if I did, then I would just drop the DVD’s. The outrage from this is pathetic. Even if you end up doing the $15.98 plan, plus $2.00 for Blu Ray if you want, you are still paying maybe 1/4 of what a normal cable or satellite plan is, and there are even fewer options with them as far as content goes. Typical spoiled customers.

  • Bas

    Wow, was it really only 10 bucks for unlimited streaming movies? I wish it was available here in the Netherlands. And as I see it, you now have to pay less for the streaming, but you lose the rentals by mail. Why would you want both if streaming works for you?

  • bard

    Not everything is on streaming. If it was, it would be a no-brainer.

  • Primal

    I had been on the $25.99 3-at-time that includes blu-ray w/ unlimited streaming. Probably see 10 films on a good week. Paying a few more dollars more now. I’m not outraged. I’ve saved so much money not buying DVDs&BDs and ripping the films I’ve enjoyed.

    It’s not a 60% increase for me. Not even close.

  • Megan

    I agree with most of the above comments. Considering the vast amount of movies available, I still think $16/mo is more than reasonable. It’s business! It’s competitive. I’ll surely miss paying $9.99/mo for both options, but I’ll probably keep both and shell out a few more dollars.

  • Suresh

    I currently get three DVD’s, and my plan will be going up $3 or $4. I’ll be keeping my plan.

  • LisaM

    This is peanuts compared to the price of cable. I pay $70 for cable with NO premium channels. I’m thinking of dropping the TV portion of my bill and buying into some online TV/movie club.

  • I think it’s a really short-sighted move. Even if it’s still a good deal compared to cable, they’re really pushing the bar on what people want to spend and consider a value. If the average customer is used to $10, increasing the price by a large percentage is guaranteed to produce a backlash.

    Also, the anger is not just about this decision. People are also upset about the moves Netflix has made over the past few years. They’ve removed the Friends feature, made all the reviews anonymous, and disallowed individual profiles for different family members. They also seem to be providing more extras-free editions of their movies.

    I’ve had a so-so experience with streaming. It doesn’t always work, and the selection is limited. I’m going to keep my DVD/Blu-Ray service and drop the streaming. I would drop the whole thing, but I use Netflix sometimes to get movies for my blog. I definitely view them as just another company now that’s out to get the most profits.

  • Colin

    I agree with Dan. $18 a month (with blu-ray) isn’t a bad deal. What bugs me about Netflix’s decision is that they’ve been stripping back functionality from their service while regularly increasing their fee. I know they’re a business and I know they’re under a lot of pressure from the movie studios who demand outrageous licensing fees for their content, but this is still a shitty way to express that to their customers.

    When you spend years ingraining in people that the value of your service is $10/mo, of course they feel ripped off when you suddenly expect them to swallow a 60% rate increase (mine is actually increasing 66%). Shouldn’t the millions of new subscribers Netflix generates per year be paying for an expansion of their service, not long-time customers?

    I completely understand and sympathize with why people are angry, though most are just upset at the surface level rate hike. I’m getting increasingly discouraged by the company itself.

  • Falsk

    Let’s not forget that they also raised prices for disc-users back in November. So for people like me using both services, it’s two price hikes in less than a year.

    Still, I doubt this’ll affect my subscription, but geez–someone’s rolling in dough right now…

    … I do miss the friend feature, too …

  • I’m on the 2 DVDs at a time + Blu-ray and unlimited streaming. With the new plan, my bill will go up by $4.

    It’s called inflation and I’m still getting a helluva a deal. Am I perturbed I have to pay more? Sure a little. But people who are “outraged” need to settle down and get a life.

    And the ones who say they are going to drop the service altogether are lying or they will be back in a couple of months when they realize what they’re missing out on.

    Side note – I really hope they don’t get rid of by mail DVDs altogether. I Love getting 2 new Blu-rays each week. The quality is SO much higher than the streaming.

  • Niklas

    it still the cheapest option out there except illegal downloading..

    its the free generation so shouldnt be a surprise tho

  • the biggest issue I have is Blue Rays. the quality of the stream to my plasma is nice, but for bigger movies it would be nice to get a Blue Ray sent. That (and selection) is the only reason to keep both subscriptions.

  • Ive said it many times – without a universal service with everyone sharing the pie we are looking at multiple memberships to every studio, etc. it is going to get crazy in the next couple years. to the point, it will not be worth having any membership since you will only get limited material. which will bring the DVD rental stores back, LOL

  • Shannon

    This is just another case of people feeling entitled to get something for nothing. If you read the business news, you know that the new studio licensing fees for Netflix are going up considerably. Of course they have to raise their prices. To be outraged is ridiculous. In my opinion, the service has been underpriced for years, particularly for those of us that watch 3-5 movies a week or more.

    I guess I can see someone who only watches 1-2 movies a month (I know, there are really people like that) getting upset, because their cost per/movie starts to approach the cost of a movie ticket. As for me, I’m still a fan.

  • Mike F

    The quality of the picture and audio is just so much better on a blu-ray versus streaming. I looked at my Netflix activity and I haven’t streamed anything over the past 2 months. At our house, streaming was a “nice to have” but not a “need to have”. If I still had kids living at home that might be a different story. So I have dropped streaming and am going with a 2 blu-ray per month program for $5.99/month. With that I still get 2 hours of streaming each month (albeit to my computer only). If I really need to stream something there’s Vudu and Amazon. This will probably get me off my ass out to the theater more often which is not bad thing.

  • Ryan Marlow

    I’m nowhere near outraged because Netflix went from “too good to be true” to “unbelievably fucking good”.

    However, I am pissed that the streaming app is not connecting on my PS3 and I’m going to have to call customer service over it. That is bogus like Bill and Ted’s journey.

  • i don’t have cable, so streaming is my main access to home entertainment. i am going to drop the dvd feature as soon as i return the two i have, as i tend to get dvd’s and then they just sit around for a month until i get around to watching them. so $7.99 isn’t too bad, i just hope the improve the streaming selection slightly.

    and on the plus side, my local dvd rental store will once again get my business.

  • Jsin

    I’m not staying with Netflix for the simple reason that I can get movies for $1 night from the redbox kisosk. I can stream from Hulu if I want to watch t.v. I do not mind a reasonable price increase, but I can get movies for cheaper. I also do not believe in such a large increase in prices. A gradual increase in price would have been more agreeable.

  • Deckard

    I’m bewildered at the volume and intensity of the outrage over this. Not only is the increase barely more than a gallon of gas, the increase becomes even less significant if you have more than 1 disc shipped. It’s still an amazing value. In fact, being a constant Netflix subscriber since 1997 I have seen at least two price decreases in the past decade. Everybody quit complaining.

  • Anthony

    I don’t use Netflix. Thanks to Rogers communications totally dicking people when it comes to bandwidth, and Netflix views usually taking quite a bit of it when you stream them, watching films on Netflix just isn’t worth it.

    Plus, the selection sucks in Canada.

  • “This is just another case of people feeling entitled to get something for nothing.”

    @Shannon That comment makes me sick. 4 dollars is not a small amount of money to everyone. I’m glad you’re well off enough to not have to worry about such a small amount, but some people are not so lucky.

    I think this is a case of many people who have been loyal customers for years, mainly because it was the one affordable entertainment option out there, having their rates jacked up during some of the worst economic times since the Great Depression.

    I don’t think *anyone* has wanted something for ‘nothing’, but a lot of people have been eating increases in everything from gas to food to clothes in a short amount of time. I don’t think it is beyond comprehension or simply a case of entitlement that people are upset the one entertainment option they could afford is increasing by 25% without much warning and without an increase in the services provided.

    Add to that an MSNBC article I read with comments by a Netflix VP amounting to ‘yeah we hear you. we just don’t care’.

    The whole thing sucks. Personally though, I wouldn’t have a huge problem with this if it wasn’t for the fact that the streaming option doesn’t offer all movies. But both are priced the same amount. So to get access to all movies I *have to* pay for both… Lame.

  • @milath

    I take great offense that you imply 4 dollars a month renders me “well off” that’s absurd and insulting.

  • Jon

    I mainly use the dvd and blu ray mail service but I like to stream old shows once in awhile. I’m not a huge fan of this personally and I hope they don’t get rid of the mail service. Personally I have a hard time deciding what I want to watch on streaming. I like getting discs in the mail because that way I don’t have to choose, I just watch the movie and send it back, receive the next one.

  • kris

    @milath

    When it comes to entertainment, I think it’s pretty simple: If you can’t afford it, then do without.

  • @shannon Yeah, well *I* took great offense that you count that extra 4 dollars as getting something for ‘nothing’. What’s absurd and insulting is implying that people who are upset by this are nothing but a bunch of whining little entitled babies who can’t toss another 4 bucks (nothing) for their entertainment option (something).

    So you called 4 dollars ‘nothing’ and take great offense at what I said. Makes sense.

    Look I don’t have a problem with you personally. I actually like your reviews. But that attitude that people expect something for nothing is what gives corporations free reign to make record profits while the little guys (like most of us) slowly drown in a sea of debt.

    @kris Sure. Go to your shitty job where you barely make enough to fund food and shelter with just enough left over to have enough to watch a movie from time to time. Then have the prices jacked up 50% and be unable to afford it. Then do without the one thing you enjoy right? Fuck ‘em, stare at a wall. Am I understanding this correctly?

    I already know I’m not going to change anyone’s mind, but I can’t just sit by and watch either. I’m one of these people who can’t afford it. I’m barely scratching by and to see comments like that where either I’m expecting something for nothing or I should just do without really is upsetting.

    My point is, I could afford it before. Then, Netflix, a company which is already making amazing profits (up 88% in the 1st quarter of this year according to a quick internet search), jacked up their prices a pretty large amount with literally nothing other than what I already get to show for it. Now I don’t have a choice but to look elsewhere for entertainment services.

    I hope I can find something within my price range because unfortunately most of the world agrees with you, Shannon and Kris.

  • @milath Ease up, dude. I can’t imagine a world without the ability to watch flicks, so I definitely feel for you, as I bet a lot of people in your situation do.

    I don’t know much about how Netflix does business nor how many people similarly can’t afford the increase, but if it’s how you describe, chances are lots of people will just cancel their subscriptions and download/free-stream movies. And if Netflix starts to lose money with their model (again, going by what you say), they’ll probably bring ‘em down again.

  • If the $4 increase is going to shatter your budget that much then you shouldn’t be subscribed to the service in the first place as you clearly can’t afford it.

    Hell, cancel your Internet connection while you are at it and focus on the things in life that really matter, like food, water and shelter.

    Jesus, what a juvenile argument.

  • @nat I hear you. I’m not angry or anything.

    Even w/o Netflix I personally will always be able to watch movies. Not everyone can though. So I’m just trying to get people to see it from my (and lots of other people’s) POV. Unfortunately I doubt the people who can’t afford/cancel on principal will make much of a dent in Netflix profits (based on comments from a Netflix VP, they expected ‘some account losses’). So nothing will change. :\

  • @Matt First of all, I fail to see how my points are ‘juvenile’. I don’t have a problem with YOU or anyone, especially not over this. However, I was under the impression this comment area was for debate over whatever was posted. If that’s not the case, I’ll stop.

    As for the other part, that’s exactly what I’ve done. I’m no longer subscribed. And maybe 4 dollars doesn’t *shatter* my budget, but it’s certainly a dent I don’t want to absorb. There are a lot of factors involved in this decision for me, as I’m sure there are for a lot of others. I’ve touched on some of them in my other comments.

    In the end, none of what I write matters. Netflix will continue on regardless and people who can’t afford it will leave and perhaps do without or perhaps find some other option. I disagree with their decision to raise their rates.

  • Napalm

    I don’t spend a dime on movies or tv shows. I got a friend named Torrent.

  • I don’t understand why milath is so confused – its your choice based on price to buy an item. coffee just jumped like 25% here in chicago, and everywhere, due to supply and demand; I can choose to keep buying coffee or not. people seem to be missing the point that Netflix artificially had lower fees for years to build a customer base. its business 101, the belief those prices would never change, or, as an early adopter you are entitled to locked in rates is foolish.

    I’ll say it again, the bigger issue we have coming is multiple platforms with memberships for an individual to have full content at hand. thats what should have people like milath worried. we are moving to a world were you will need 5 or 6 monthly subscriptions,at like $27 a month each, to get access to all content. its the modern business model – they will give you the phone for free to get a monthly subscription. that is when the privileged people will have access to entertainment and information and the poor will not. that is shit. why we can’t have one access point and studios share the wealth, my dream is foolish I know. but I can tell you now, the system I describe will suck.

    I will give out a million dollar idea right now. someone needs to be inventing a business model were I can pay one membership to a third party and get all access to any content from these other subscription sites. BOOM!

  • Primal

    @milath Napalm suggested the best option for you. Although torrents don’t have everything that Netflix has, I’m sure there are some nice finds you can only find in torrent. Downsides are that it isn’t On-Demand and it takes time to download. Also uses HD space on your computer and the only dime you gotta spend is on a computer.

    DVD rental stores seems to be a good way to go too. I’m not sure if this is real cheap, but I’m now seeing Blockbuster put banners of $0.99/day rentals in light of what Netflix has done.

    Off the top of my head, for students, the unemployed, minimum wage earners, part-timers and losers could think that this is a large amount of money financially. It also morally effects the cheap people, right?

    Let’s face it, watching movies can be a pricey recreation. Especially if your out there to look for old and obscure movies. It’s a drug of choice for many people out there and most of these people don’t complain of the price.

    The fact that the Netflix price hike effects you a great deal tells me shouldn’t of ever been a Netflix subscriber and I’m glad your off it now. I’m with what Matt Gamble said to you and in the immortal words of Ice Cube, “Check Yo Self Before You Wreck Yo Self.”

  • My last word, as I have read hundreds of comments on the news blogs as well over the weekend. The reason I’m okay with whatever Netflix wants to do is because entertainment is a luxury, not a right or a necessisity. I was much more upset when milk jumped to nearly $4 a gallon a few years back.

    I have bought 2 cups of coffee at Starbucks in ten years, because I won’t pay the prices there. I make mine at home. My choice.

    Whenever my husband and I have to crunch the budget, it comes out of our entertainment portion. We have, in the past, done without cable, and we might again. We know that it is not the same as schooling the kids, food, gas, and shelter. Does it suck? Heck yeah, especially since I am a pop culture nut, but there are *always* ways to access entertainment.

    Just an observation-I would not have been able to afford that extra $4 when I was in college. I get it. I also would have flunked out if I had access to all the media college kids do now. I’m thankful I went back in the old days. We didn’t even have the internet.

    @Milath did not mean to offend, but if this was a true life or death commodity I would be staunchly in your corner.

  • My last word on this. I’m not confused, and I’m not saying this price increase is either the end of life as we know it, nor is it a budget buster for me personally. It’s just an increase I disagree with. That’s all. Considering the response around the internet, I’m not alone in this. Again, I’m no longer a Netflix subscriber. If I do return it will be streaming only (and perhaps with a trial through FJ!), that is, assuming I can’t find a better option for less. The end.

    Shannon, I appreciate what you wrote there. And I apologize if I came off harshly. I don’t know your personal situation and I shouldn’t have made assumptions. To anyone else I’ve angered or offended, please know this was not my intention in debating this topic. I really don’t want to verbally spar about it anymore. We’re all FJ fans here, so let’s just agree to disagree and let it go. Okay?

  • MJS

    This is NOT just a miniscule price increase, and it’s not just $4. As recently as the July of 2009 I only had to pay $16.99 a month in order to get three discs at a time, which is the basic price that I’d been paying for the better part of a decade. Two price increases later (people forget that this is the second price increase in less than a year) plus a surcharge they started issuing in order to get Blu-Ray and now my bill is going to be $27.99, oh and on top of all that they’ve stated holding back new releases 28-says too. That’s an eleven dollar increase just so they can pay licensing for streaming, a feature I never asked for, use infrequently, and can live without. THAT’s why I’m outraged, and frankly I’m not sticking around in order to find out what the next thing they’re going to do in order to gouge me further.

    I’m planning to switch to Blockbuster Total Access. They charge $19.99 a month for three discs at a time, which isn’t a perfect deal, but they don’t hold back new releases and they don’t charge extra for Blu-Rays (they rent out video-games to). It’s like Netflix before Netflix decided to shove streaming down everyone’s throat.

  • MJS

    Correction, I was still paying 16.99 a month as recently as the July of 2010.

  • LUDY

    If you can’t afford $16/month for practically unlimited entertainment, then you shouldn’t have been paying $10 before in the first place. If Netflix raises it’s prices again in the future, say to $30, THEN I will reconsider my entertainment priorities…heck, perhaps I’ll even pick up a book and read! Sure $10/month was better than $16, but it sure as hell beats paying $50+/month for cable. Maybe not every single movie or show ever made it available on Netflix, but their selection FAR outweighs the majority of current television programs out there. TV is stuck in a rut of “reality” shows which all bring out the WORST in our society. Gimme brain-eating zombies, thought-provoking documentaries, and action-packed superhero movies over this crap called TV ANYday. Not to mention, I haven’t been “forced” to watch a single advertisement on TV in months now! ^_^ …YouTube, DailyMotion, etc…now that’s a different story. Commercials that precede a viral video pisses me off to no extent. :P

  • Allsic

    I am getting Netflix in Mexico via http://www.unblock-us.com so I pay $7.99 for Netflix plus $5 with streaming only.. since i cant ship dvd or receive them… and I dont care paying additional money.. the content i am getting right now will last years in coming to Mexico. Here the TV still sho3ws movies from the 90’s a Sunday Afternoon, crap coming from Televisa and TV azteca.. and Mr Slim who owns the DIsh Network… he wants us to pay $15dlls for shitty content… I Love Netflix and I know it will be legal in Mexico before the year ends, but i will stay with the US content…rather that thanbeing benned for the good shows…!!!

  • kris

    @milath

    “Go to your shitty job where you barely make enough to fund food and shelter with just enough left over to have enough to watch a movie from time to time. Then have the prices jacked up 50% and be unable to afford it. Then do without the one thing you enjoy right? Fuck ‘em, stare at a wall. Am I understanding this correctly?”

    You’re understanding this correctly, yes. I actually do work a job that barely gets me by, and you know what that means? It means I don’t subscribe to Netflix right now. If you can’t afford to be entertained, I’d suggest visiting your local library–Every thing there is free.

  • Netflix is still an amazing company and we’re only talking about a few dollars. Lets stop focusing on the 60% figure. Unfortunately, the price increase was needed to survive. They completely undervalued their services from the beginning, which they should have planned for better. They still have my business though.

    http://cellpig.com/blog/information/netflix-dominates-movie-streaming-price-increase-follows/