Netflix Price Hikes Cause Colorful Backlash and Outrage by Customers
GigaOM reports that Netflix (NASDAQ:NFLX) subscribers were up in arms with anger yesterday after the company announced its new pricing plan, which raises the monthly rate for a combined DVD and streaming package to $16 up from $10 per month. Flix also offered a cheaper $8 per month DVD only option, though subscribers are not liking having to make a choice between the new packages.
Among the top of the 5000 comments on the Netflix (NASDAQ:NFLX) official blog post re: the new price plan. Anonymous: “Are you F#**!!@! kidding me?” Ahecht: “I guess it’s finally time to cancel my Netflix subscription. DVDs + Streaming gave me a great bang for my buck, but by not offering any sort of bundling discount for those wanting both, I can’t justify sending you my money every month.” Anonymous: “How exactly is this the “lowest prices ever”? According to the article, a 1 dvd plan with unlimited streaming will now cost just about as much as I’m currently paying for my 3 dvd plan with streaming. Not only are you slapping existing customers in the face with a fairly significant price increase, but you’re outright lying about it too.” As you can see, the majority of customers are not thrilled with the company’s new pricing options.
Wall Street seems to have its reservations regarding Netflix’s new plan as well, with a Jeffries analyst writing, “While $7.99/mo or $9.99/mo plans often flew under the radar on subscribers credit card bills, we believe it’s important to point out that $15.98/mo or $19.98/mo could make many subscribers flinch, or at least be more aware of it. Further, downgrading a plan to streaming only may not provide enough new content to satisfy many subscribers. As such, it is possible that churn could pick up more meaningfully than we’ve assumed in 3Q/4Q, eating into subscriber growth and valuation.”
We’ll see if Netflix (NASDAQ:NFLX) responds to popular sentiments by rescinding or further reorganizing its proposed changes. At present the company may stand to lose many of its subscribers if it refuses to budge before the Sept. 1 deadline at which current customers are required to select a new plan.
Check out how Netflix’s new plan is affecting their primary competitors: Amazon.com Inc. (NASDAQ:AMZN), Dish Networks (NASDAQ:DISH), Best Buy (NYSE:BBY), Comcast (NASDAQ:CMCSA), AOL (NYSE:AOL), Time Warner (NYSE:TWX), Time Warner Cable (NYSE:TWC), DirecTV (NASDAQ:DTV), TiVo (NASDAQ:TIVO), Echostar (NASDAQ:SATS), Coinstar, Inc. (NASDAQ:CSTR), Apple Inc. (NASDAQ:AAPL) and IMAX (NASDAQ:IMAX).