The Dark Side of Netflix

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11/23/2010

Netflix Raising Prices - You're Going to Take It and Like It

I Heart Netflix

Surprise! Netflix is raising prices. Isn't it odd that a company gets bigger and then raises prices? One of the core benefits of a business getting bigger is that it can offer superior service for lower prices than the competition. In theory, (barring a monopoly or trust) as a company expands, the overall value of its goods and services should continue to become more attractive to customers.

In Netflix's case, however, customers seem to often get less service for the same price or the same service for a higher price. This is not always the case with each pricing change at Netflix, but it certainly is a common occurrence. Think about this. Whenever Netflix makes one of its sleazy deals with the movie studios, do your subscription prices go down, or does Netflix keep making you pay the full price and keep all of the profits for itself?

With such a large market share, Netflix must be getting cocky. Perhaps, Netflix knows--from experience--that its customers will accept all sorts of abuse, provided that abuse is doled out quietly in small amounts.

"Small amounts" might be a slight understatement here.  If you are on the two-out plan, you are going to take a hit of just over 7% on your monthly subscription fee.  If you are on a three-out plan, however, your prices are going up nearly 18%.  In how many areas of your personal finances would you be willing to accept an 18% increase to a luxury expense?

So, if you remain a Netflix subscriber, you will soon be paying more for the same level of service or worse. Are you going to cancel your service, or will you just take the abuse?

Aww, c'mon.  We all know you're going to submit and take the new abuse. Much like Maggie Gyllenhaal in Secretary, you masochists just can't get enough of your cruel red lover. Hey, when you create a new account with Netflix these days, do they make you select a safety word in case things get a little too rough?

6 comments:

Anonymous said...

Happy to say I made the jump two years ago so I don't carry the flag any longer. Netflix is now evil, just like every other big company who takes over a market (Blockbuster did it way back, driving out all the mom and pop businesses and then charged more). What first opened my eyes was when Netflix started charging extra to rent blu rays and claimed it was because they had to buy so many of these newer, more expensive discs to beef up their inventory. So they pass the buck off to the customer, $2-$4 more a month, depending on your plan. You know how much money they rake in on this? Not much to spend for us really, but over time how much does it add up to? And months after, most new release blu-ray titles were STILL "very long wait." It took at least a month before a title was available. So let's see here, I will pay you $36 more per year for the priviledge of renting my movies in HD, I'll wait just as long to get them, and you'll keep charging this extra amount for God knows how long, even though the cost of manufactoring these discs is ridiculously cheaper now and no one else in the business is stupid enough to charge extra to rent blu-ray still. Oh but wait, Netflix does. And why? Because they can. And too many people are willing to shell it out to them without question.

Anonymous said...

Just where is one supposed to rent movies nowadays if you aren't enough of a movie watcher to have a Netflix subscription but like different kinds of movies than can be found in Redbox? Yeah, it was bad enough that the big chains killed the small local movie rental stores, but Netflix has really destroyed the market for rental moveis. Netflix is EVIL.

M Lee said...

Mr Reed Hastings CEO Netflix [url]reed.hastings@netflix.com[/url]. Right now Im paying about $10, you want to raise the same service to $16. a 60% increase. There's alot of other entertainment sites on-line for me to chose from. Been with you since 1999. Until now you never missed a beat. Whomever had the final word on this decision or yours is not in-tune with the economy Times now necessitate having a tight pocketbook. There's a lot less discretionary $ around now. I imagine when you were discussing this you all agreed that you'll lose a certain percentage of customers. Well come Sept Ill be on that list. I have my free local library, hulu,[url]www.myretroflix.com[/url] and others all FREE. Bye Bye come Sept. M L

sambobadger said...

I will certainly be leaving in Sept. Netflix is starting to get too mean spirited for me.

M Lee said...

send an email to netflix CEO Reed Hastings and tell him what you think

reed.hastings@netflix.com

Anonymous said...

Netflix has deluded itself into thinking that it's a public utility that people can't live without. Well, we lived without Netflix before and we can live without it again. There are millions of DVDs in public libraries that people already pay for with their tax dollars. I can just as easily return a disc to the library as I can to the post office. I'm canceling my Netflix DVD subscription in Sept. and saving $2 per month. I guess I win after all.