44 Comments

Summary:

The Netflix blog has seen thousands of comments ever since the company announced its new pricing structure earlier today, with many customers threatening to cancel altogether. People are also turning to Facebook and Twitter in what looks like a major backlash against the company.

angry man with sign

Subscribers have been up in arms since Netflix announced a changed pricing structure on Tuesday that will raise the price for a combined DVD and streaming subscription from $10 to $16 a month. The company is also offering DVD-only and streaming-only subscriptions for $8 a month each, but most people don’t seem to like the prospect of having to choose: The Netflix blog has seen more than 4,200 comments, most of which are negative, with a number of customers threatening to cancel.

Countless consumers have also turned to the company’s Facebook page, with negative feedback far outweighing any other kind of response. And on Twitter, the discussion around the plan changes has made “DVDs” an unlikely trending topics in a number of cities. Check out a few highlighted tweets to see how people feel about the company’s plans:

View the story “Reactions to the Netflix price hike” on Storify.

What does all of this uproar mean for Netflix? Of course, it’s unlikely that any price increase would be met with a thumbs-up by many consumers. However, the intensity of the backlash seems to suggest that Netflix really does have a problem.

Netflix has long enjoyed a lot of good will from its customers, simply due to the breadth of its DVD offering. Consumers tolerated the lack of selection in the company’s streaming catalog because it was seen as a value-add to their existing DVD subscription. Recent hiccups, such as Sony removing titles from the streaming catalog, also didn’t lead to many complaints.

However, with streaming and DVDs effectively being separated from each other and users being forced to pay twice as much, many customers are seemingly losing their patience with Netflix. The company may have to go back and do a better job at explaining these changes — or even unveil some great new streaming catalog additions before the September 1 deadline that will force people to pay more, choose between streaming and DVDs or cancel altogether.

Image courtesy of Flickr user soukup

  1. angry man without sign Tuesday, July 12, 2011

    i am very angry about this. argh!!

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  2. Not my Real Name Tuesday, July 12, 2011

    It wouldn’t be so bad to have to chose between DVD and streaming if Streaming had more options and you didn’t have to wait over a month for a DVD

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  3. This is just a monumental screw-up by Netflix Any value they received from the goodwill of their customers just got tossed out the window. Now they have an angry mob that’s ready to stop paying them at the end of August, if not sooner.

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  4. Luke Freiler Tuesday, July 12, 2011

    As a long time Netflix subscriber, I couldn’t care less. I’m more than happy to limit to just the Streaming service, which seems to be their motivation anyway. If this pushes digital streaming forward faster, more power to them.

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  5. Johnathan Riley Tuesday, July 12, 2011

    I had never even looked at alternatives before today. If your most loyal clients are suddenly looking for a way out, it’s a big problem. The most galling thing is the huge price increase with no offer of improvement in service. What was $10 is now $16, because… what?

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  6. Apparently there’s more than one GigaOm journalist that can’t put proper research into their article.

    http://money.cnn.com/2011/07/08/technology/netflix_starz_contract/

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  7. It will get worse when Netflix’s contracts with content providers expire. In % terms the price hike is ridiculous but relative to a $14 3D movie theater ticket the monthly streaming/DVD package is still a bargain.

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  8. This very large bump up in price seems a little out of character for Netflix. They really do have a lot of goodwill in consumer circles and I don’t think it’s just because of the breadth of DVDs they offered. Along with providing us with a good and popular service at a very reasonable price, they are also very lenient on returns, occasional losses, and paying attention to their customers on even little things like re-issuing damaged discs. Netflix also went out of its way to just give a small discounts when their streaming service would go down. It’s very rare these days for a consumer to get premium service at a non-premium price. I really hope this price/service announcement is just a bad marketing test.

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  9. I think if anyone is jumping for joy it is Redbox. I was talking to another loyal Netflix subscriber today at work, and he’s like me, changing to streaming only now. Redbox can more than fill in the gap of DVDs to watch, especially when considering $8/month. For that $8, I think I’d get more use from a Hulu Plus subscription.

    And personally, it’s been harder to find good material on Netflix streaming, and I can now really see a potential future without it altogether.

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  10. coolrepublica Tuesday, July 12, 2011

    People at Amazon must feel that they have handed a gift from netflix. I hope they use it wisely.

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  11. cassidy moss Tuesday, July 12, 2011

    netflix is the reason my late fees stopped being a problem at all my local video stores, i havent had a need to rent from them. When i got the email that prices were being raised more than 50% though, i seriously considered dropping them right there. Guess i’ll wait till the end of october, then be done.

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  12. Yep…might as well just go back to blockbuster.

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    1. There are still Blockbusters?

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      1. Blockbuster Express. It’s $1/night like Redbox, but many of them have bigger selections. Not to mention, they send me e-mails all the time with promo codes for free overnight rentals and rent two/get a third free.

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  13. I can’t understand why you all are whining. If you are going streaming-only, you are not affected. If you get DVD via mail, isn’t this close to what they were offering before they started streaming? Think about the costs 44 cents a DVD, 88 cents postage just for 1 DVD round trip. If you manage to watch 6 per month, it is $5.28 just in postage costs. $7.99 is not that far off. Those who are ditching Netflix won’t find a better value elsewhere.

    As for me, I would stick to streaming and would have paid even $10 or $12 just for streaming, if they promised a better library.

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    1. Alok, part of the problem is that Streaming only doesn’t include ALL of their catalog, only a small portion of it. If they had all their movies as a streaming option then I’d agree with you. However that is not the case.

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      1. Don’t forget that a lot of the streaming selection is still in standard def… it lacks much HD content.

        but there’s plenty of direct to DVD trash and anime now. Wheeee. :/

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  14. I think Netflix’s mistake wasn’t that they raised their prices. That was inevitable with increased demands on streaming and licensing fees that will push their costs up dramatically. Their mistake was not just coming out and saying it that way instead of trying to spin about how this is a better deal for customers. I think people are a lot more understanding when they feel the company is being down to earth. Right now they feel like they are being handed corporate speak and it is galling to them.

    I have to add that it surprises me that people blame Netflix for the depth of the streaming catalog. Just read the Sony articled linked in these comments and you can see that the studios and ISPs are starting to step in and in the long run all of this will cost Netflix money which they will have to pass on to their customers.

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  15. Thanks Netflix Wednesday, July 13, 2011

    I’ve been paying for the 3-at a time plan and was planning to switch to the 9.99 deal because I rarely order dvds (this year to date, I’ve ordered 13; last year – 10 total). No more. I understand that Netflix felt they were leaving money on the table. Well, so was I. Instead of paying netflix $20 for streaming and a few DVDs a month, I’ll pay for streaming only and use Amazon video or blockbuster express for DVDs. Thanks Netflix!

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  16. BTW, the price for the full plan is $18. Email from Netflix:
    Dear Customer,

    We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

    Your current $11.99 a month membership for unlimited streaming and unlimited DVDs (including Blu-ray access) will be split into 2 distinct plans:

    Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
    Plan 2: Unlimited DVDs (including Blu-ray), 1 out at-a-time (no streaming)
    for $9.99 a month

    Your price for getting both of these plans will be $17.98 a month ($7.99 + $9.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

    These prices will start for charges on or after September 1, 2011.

    You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the Plan Change page in Your Account.

    We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

    –The Netflix Team

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    1. Looks like it is $18 for you because you chose to get Blu-ray discs as well, which is a $2 premium.

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  17. The plan changes September 1, that means there will be a mass cancellation in the middle of August. Sorry Netflix, but your streaming content is lame, the only thing that makes your service valuable is the added CD delivery of regular content. Neither is of any value alone. Redbox $1 rentals plus a membership in Amazon Prime gives me a better selection and a better shipping cost on Amazon. Au revoir Netflix, you have officially jumped the shark.

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  18. You don’t understand because you either didn’t read or didn’t comprehend the article.
    1. Fees are going up as high as 60%.
    2. Streaming does not offer nearly the selection of DVD or Blu-Ray.
    3. Netflix is doing this to force customers to streaming which is a sub optimal solution in terms of selection and quality?

    Got it?

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  19. Pretty simple reason. Netflix wanted the number of online subscribers to decrease (yes you read that right) so that they can get Sony movies back. A lot of DVD customers were kind of getting free online subscription thereby artificially increasing the numbers. This move will fix that and users who watch online only will benefit. Smart move IHMO though a bundle discount would have assuaged a lot of customers.

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  20. Remember back when the only plan was $19.95 and didn’t include streaming?

    http://money.cnn.com/magazines/moneymag/moneymag_archive/2000/04/01/276484/index.htm

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    1. I do. I even subscribed, because back then it was good value. Back then internet content was there, but not so rich. Back then the only meaningful competition was Blockbuster, local but with late fees. There was no Hulu, no Amazon Prime, no Redbox, few people had real libraries of DVDs – most still had a lot of VHS – so very little availability of used or cheap DVDs.

      In 2011 I have Amazon Prime, Hulu is free even if Plus isn’t, Redbox is cheap and ubiquitous, and I have online gaming, rich discussion groups on a variety of topics, all the news and commentary I can drink through a firehose – in short, many satisfying ways to spend my sit-on-my-hiney time that I didn’t have so much of in 2000, plus lots of ways to just passively plop down in front of the boob tube on the increasingly rare evenings I choose to do that.

      I think Netflix could have held on to more of their good will if they had done two things:

      (1) Really pushed the fact that their juicy streaming contracts are not going to be renewed at the same favorable rates. Engaged the customer in mutual problem-solving, and to an extent, mutual victimhood, and

      (2) Had given even a small price break for people who want both. It’s still a large increase, but the small consideration, combined with point (1) would have been a LOT better received, at least in our household.

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  21. The hidden motive Wednesday, July 13, 2011

    IHMO Netflix really wanted to reduce the number of online streaming customers. This would allow them to bring back Sony via the Starz deal. I suppose there were plenty of DVD only customers who had streaming included in their plan but did not use them. This would remove such customers which will eventually benefit streaming only customers. However Netflix could have made easier on some customers by including a bundling discount.

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    1. This could be a side benefit as well — with fewer streaming-only customers, Netflix could possibly bring Sony titles back on Starz.

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  22. I understand why Netflix is raising prices. They have to pay the bill to the greedy movie studios so we can watch movies. The studios don’t realize they are simply biting the hand that feeds them. I’m sure they don’t like that DVD and Blu-ray sales are flat while Netflix is making money. They’re determined to have the whole pie or take down Netflix trying.

    The reality is, though, that I and many others rarely use instant streaming as their library is pretty lackluster and any time I find shows I like they rotate them out of cycle within a month or two. The DVD service is still good because it has a complete library, but it isn’t HD. I refuse to buy any Blu-ray products since Sony collects license fees for the patents it owns on the technology. Moreover, I would never pay the extra fee just to have the privilege to rent Blu-ray discs from Netflix if I did have a Blu-ray capable player. Regardless, I always felt $10/month was the upper limit I could see paying for a service that still has the aforementioned flaws. I have been debating canceling it for a few months, but this made the decision for me. Come August 31, I’m canceling DVD and streaming services. It just isn’t worth it to pay $8/month for either one alone. Both services together is almost worth it, but separately they aren’t. Netflix as a whole, really is greater than the sum of its parts.

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  23. Quit your friggin whining you sissys and turn your unjustified hate onto the REAL source of the price hike … the greedy studios! Has ANYONE payed attention to how they have publicly admitted they are going to gouge Netflix as much as 10 TIMES the current licensing rate on renegotiation starting next year, because they dont have the balls to invest in their own delivery platforms!

    I dare any of you schmucks to find a media access system that doesnt cost 5 times the NEW Netflix rate. Punks!

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    1. HERE HERE! Agreed.

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  24. Cancelled today.

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  25. They just raised the rate this year and now they are splitting the package so they can raise the rates again. Especially since they don’t have all the movies streaming or on disc so the only way to get all the movies you want to watch is to pay for both. In effect a price increase. I have so many personal movies I’m not sure I will continue to subscribe it’s a total rip off

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  26. I’ll stay with the streaming, and rent my dvd’s from redbox.

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  27. I have 0 problem with the price “increase” I never use the DVD function of my subscription so this will actually let me save $2/month. I don’t entirely get the anger myself. Even at $16 a month, it’s still a very reasonable package. I remember paying more for my Hollywood Video account back in the day. Netflix is also allowed to generate a profit, and prices are going up everywhere. I hope that the change to package does lead to an increase in their catalog for streaming especially. I hope that enough people go for streaming only and they can show the movie companies that streaming is where it should be at. 60% seems like a huge price increase, but coming in under $20 a month for the endless hours that I use the streaming service is nothing compared to the cost of similar activities out there, it’s still less then a date night at the movie theater.

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  28. Why is there a pic that has a guy holding a sign that reads “Angry man with sign” This pic was not taken at any place related to DickFlix. Journalists are all phising scammers.

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  29. This move is a very bad blow for hi-resolution entertainment. 1080P Blu-ray discs are basically too expensive to purchase and already difficult to be delivered in a timely manner by mail through relatively cheap rental services like Netflix and Blockbuster. Kiosk-box disc rentals are also highly limited in their blu-ray selection. And then this is compounded by the very few 1080P online movie streaming services like Vudu, etc. Add to this solution the fact that many potential hi-def users are burdened with ISPs that are throttling bandwidth or capping it altogether. Unless we are willing to pay a significant amount more for hi-def entertainment or unless Comcast has a sudden change in their predatory business model, 1080P entertainment is about to lose a whole lot of customers. And that is really too bad and not good news for the film and consumer electronics industry.

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  30. I’m in a fix. Our local DVD rental store went out of business. I can’t stream because Time Warner in our area pretty much tops out at 3 kbit/sec (pathetic!). I guess I need to look into Redbox or something, but it used to be so EASY to just go to the stor, browse the huge selection there, and find something. Can’t cache using AppleTV, as that requires HDMI input on your TV; I just have normal inputs.

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  31. Do you believe the nerve of this group of money hungry clowns, They ought to fire the person that came up with this idea!. when you look look for the latest or the better, or newer released movies out there, they are not available for streaming video, the selection is not that much to choose from! and whats out there is in standard def!! and you have to go to the DVD. to see what streaming doesn`t have, and now they`re double the price for one DVD a month with streaming. this is just plain greedy and ALSO sucks now!. I hope that everyone quits they`re service!! I am, HELLO REDBOX! :-}. whats that sound? OHH, yea MASS EXODUS!!

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  32. I represent the very profitable customer who Netflix is going to be loosing revenue with this change. Currently I Pay $19.99 for unlimited streaming and 3 disks. I go through periods where I don’t send any disks back for months and then maybe exchange a few times before slipping back into hold mode. People in my family stream 1-3 things a week at most. I was thinking about going down to 1 disk, when I got the price hike notice. No Way and I going to pay $24 for the service with my usage and I expect most of the other very profitable low usage customers are thinking the same thing. I haven’t decided what I will do yet, but will probably go either streaming only or one disk and streaming. Either way less money, for Netflix, plus they will have to pay more postage if I go with one disk, because I will be sending it back constantly, instead of just letting it sit around the house for months like I do with 3. I don’t think Netflix is going to come out on top with this move.

    Your current $19.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

    Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
    Plan 2: Unlimited DVDs, 3 out at-a-time (no streaming) for $15.99 a month

    Your price for getting both of these plans will be $23.98 a month ($7.99 + $15.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

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  33. i enjoyed netflix that is untill prices and the plan changed, now im cancelling it..

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  34. Greed GREED greed … the price should remain the same with the increased membership subscription …GREED!

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  35. Got a reminder on my calendar to cancel 9/6/11. Netflix goes public and jack the rates 60%. Not gonna get my money. Was a great value, now a poor one. Hope you all cancel too!!!

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  36. The selection and the quality of streaming just isn’t enough alone, especially when you’ve had the best of both worlds for so long. I cancelled a month and a half ago, still catching up on my DVR’d stuff, after that, maybe a hobby.

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