The Dark Side of Netflix

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7/13/2011

Netflix Price Increase Marks a Good Time to Plan Your Exit

Exit Netflix Sign

Perhaps growing comfortable with their market share, Netflix has decided to dramatically increase prices. The new pricing structure will divide Netflix customers into two basic classes: those who stream video and those who receive DVDs in the mail. If you want to stream video and not receive DVDs in the mail, you will pay $7.99 per month. If you want to receive DVDs in the mail and not stream video, you will pay $7.99 per month. If you want to stream video and have one DVD out at-a-time, you will need to pay $15.98 per month for the privilege.

For some subscribers, this will amount to a 60% price increase. An increase of around $6.00 per month may sound manageable, but when considering that amounts to $72.00 per year, the cost becomes a significant issue. Also, consider that Netflix is a luxury expense. In how many areas of your life are you willing to accept a price increase of 60% on a luxury expense with no appreciable increase in service? For example, if you frequented a restaurant and it suddenly raised its prices 60% without improving the food or increasing the portions, how often would you return to that restaurant?

It appears Netflix is aggressively trying to discourage subscribers from renting physical DVDs. Netflix must really hate paying the costs of a DVD-by-mail business. Even though Netflix subscribers have become largely accustomed to being abused by Netflix, a price increase of 60% with no substantial increase in subscriber benefits seems a bit extreme and could be seen as almost a deliberate hostility toward DVD renters.

Assuming you've suffered some sort of dreadful head injury and you now wish to begin a new Netflix membership, you have no choice but to accept the price increases right away. If you are an existing Netflix subscriber, you have until around September to change your viewing habits or get hammered by the big increase.

You may have noticed that you can't spell "Netflix" without E, X, I, and T.  You may have also recognized it may be time to start looking for the way out.  Fortunately, subscribers have a few weeks to plan their exits from Netflix. If you are Netflix subscriber, and you wish to exit Netflix, you are advised to plan ahead. The biggest pitfalls to avoid when canceling your Netflix subscription are getting charged for extra months and getting charged for DVDs Netflix may claim were never returned or returned after the due date.  To minimize these possibilities, consult the cancellation procedure outlined at "Canceling Your Netflix Subscription."

If you put your Exit Netflix plan into place and properly end your Netflix subscription during the next several weeks, you can avoid the price hike and apply the money in your entertainment budget toward better values.

If you would like to help your fellow Netflix Underground readers by recommending some alternatives to Netflix and providing some other Exit Netflix tips, please click on comments below and post your suggestions.

26 comments:

Anonymous said...

I have been a member of Netflix since they started offering their streaming service in "addition" to their mail service. I feel that the content that Netflix is currently providing on it's instant service is too "old" to justify the proposed price hike. At the moment many older movies that should not be classified as a new movie are not available to the instant Que. In my opinion a movie that has been on DVD longer than two years should not "only" be available on disc. I do understand why Netflix has reclassified all new releases as premium service. They have stock holder's that they have to answer to. I honestly don't feel that Netflix can justify doubling the fee that they charge for the content that they are providing though. I may take my business to the Redbox when I want to see a new release. Redbox is starting to become a more cost effective option.

RENEGADE™ said...

I was more than happy to stream whatever was available and get a DVD or 2 once a week on the $9.99 plan as it was a nice convenience to have. I regret to say when the plans split and you have to pay more especially in this economy the way it is now. I will no longer be a member of netflix.
It was fun while it lasted.
HULU & redbox here I come.

Anonymous said...

This move will push me to get the DVD only and for streaming use Amazon Instant Video (free with Prime accounts) They may not have as many movies but I am already paying for it and I can reduce the amount I pay for netflix.

Anonymous said...

Screw netflix for raising their price by 60%! Not only are they not providing better service they're taking away decent movies from the instant streaming! Espicially when there really isnt a good selection to choose from before hand. I hope either blockbuster or redbox puts them out of business. I've been a member since 2008 and this is how they treat thier loyal customers? SCREW 'EM

-Petaluma, CA said...

I purchased the first Netflix streaming box, pre-ordered it online. Still working, though the power cord went out and I had to replace it. So sad, I was a happy customer but now I can try out RedBox and will save money. September 1'st I will cancel my service.

connie drogoul said...

i think it is fundamentally wrong to increase the cost of a service to your clientele by 60%. this change out of the blue without any kind of acknowledgement on their part that they are increasing their prices by 60% just seems so very out of the box and unacceptable.

I was really upset yesterday because I thought the company was great and I felt so good about it and then it turned around and did this number on it's existing customers with no apology. WOW

I will use my netflix till the end of august and then cancel it and find an alternative to netflix. For after their email and the way they just acted I would rather pay more with someone else than stay with someone who treats their customers with such little consideration.

Anonymous said...

How is this fair 60% increase and then you tell me it is a good deal what a kick in the teeth. What would you think if you lost 60% of your client base. I bet you wouldn't like that.

Anonymous said...

I am a very Unhappy Customer, What the heck is Netflix doing? I have been a customer of Netflix for several years and have given Netflix as gifts. I will no longer give Netflix as a gift and I don't think I will remain with you as well. I am going to check into some other options. I can get 5 CURRENT MOVIES on Pay For View for a little more than what you are going to up my membership. I will not have to go to the mailbox to get the movies either. I do believe I will also check into Redbox. What jerk at the top has made this stupid change?? I am sure you will be losing a lot of loyal customers.

Anonymous said...

I have also been a member since Netflix started. I loved it. I even got others to sign up with the free month card. With the way the economy is we rely on companies like Netflix to provided cheap entertainment for the masses. The first time they increased there prices I was okay with it. Now there is not a single valid explanation for this. After many years of great service it is time to say goodbye Netflix. Word of advise before I part, increase your streaming movies they are LAME!

Anonymous said...

Like everyone else I was appalled to be told that Netflix was arbitrarily increasing the cost of my account by 60%. This was the final straw so I cancelled my account today. I wanted to inform them of my decision and the reason but there is NO way to contact them with any email, blog or other other than their blog which only gives reasons (select one) for canceling such as you shot my dog kind of complaint. Totally lame.
They need to understand that they are not the only game in town and I hope MANY more feel like I do and cancel.

Mike said...

Netflix just provided me a huge incentive to finally leave them. I will be terminating as soon as my month is up. With all the growing competition out there they will be joining the ranks of Blockbuster and other failed video rental providers.

Anonymous said...

I will no longer be receiving Netflix. It is unbelievable to me that they are SO GREEDY as to nearly double the price. I was able to afford the $9.99 (which started out as $8.99) but I REFUSE to stay with a company that is so obviously out of touch with the consumer. I agree with Renegade: "Hulu and Redbox here I come."

KipEsquire said...

FWIW, two of my last three DVDs were acknowledged as received by Netflix a day late. I'm a heavy (2 per week) disc user.

On top of everything else, could it be that "throttling" has returned?

RJ said...

I have been a member since 2007. I did not mind when they charged extra for b Bluray. But, this increase is the beginning of the end for them just like it was for Microsoft. Netflix thinks they can put the squeeze on captive customers like Microsoft did. But, when alternatives to Microsoft appeared, customers fled and will not be back doing business with the company they most hate to do business with. I am profoundly sorry that Netflix has gotten greedy and is squeezing their customers. They have not learned yet that short term gains is a way to lose money in the long runand keeping customers is long term strategy because that is where the money is. With what they are charging, some competitor will emerge as the profits are now very high and customersf will flee just to save a couple of bucks a month.
In September, I will drop the streaming and go to Amazon and the $1 Redbox rentals. I will keep the one DVD at a time for the old TV series I like to watch.
Divorce from a service you love is sooooo hard.

Anonymous said...

I'm extremely pissed off and agree that netflix is full of it. As a loyal stupid customer I continue to give them my hard earned money for poor service and a garbage selection. F netflix and I hope they fail and loose every damn customer Don't be stupid folks I'm sure there are other options for our entertainment dollars

Anonymous said...

FUCK NETFLIX ASSHOLES

Anonymous said...

I've been a Netflix customer for several years, but it may end soon. Aside from the rather shocking price increases, which have led me to drop my "Instant" subscription option, I have been receiving a whole slough of poor quality DVDs that I have had to send back, only to get another unplayable DVD! Looks like, if you prefer to get the DVD disc itself and not opt for the streaming option, they're going to convince you to do so by sending scratchy, scarred, and cracked product through the mail! I may just opt for file sharing sites and do an end-around the whole greedy capitalist enterprise.

Anonymous said...

price increases..underhanded tricks..world market expansion...can anyone else see a similairity between whats happening to what happened with aol?

Paul J. said...

Thanks for the guide, I linked to it at my blog for those that might be leaving. The last thing I want is people getting screwed one way and then the other by Netflix.

Anonymous said...

I exited Netflix and went to Blockbuster. I have no interest in streaming - why would I want to watch stuttery pixelated '90s quality video on my $2000 HDTV? - so the BB 2-at-a-time package is great for me. Plus, the turnaround time is one day faster than Netflix.

Anonymous said...

I have been with Netflix for a long time, my kids ADORE it, instant watch is awesome. Going to the movies cost a FORTUNE, at least $30-40 plus every time, I am willing to pay that additional to keep this company because in the long run, it saves me money. A single mom and two kids? Netflix rocks for our money! Redbox? Who has time to go to the store and get that, think straight people, working parents need CONVENIENCE and to save money.No exit for me! -Melinda Braschell

Anonymous said...

THIS BLOG IS PAID FOR BY GOOGLE,
shame on you google!!!

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Anonymous said...

THIS BLOG IS PAID FOR BY GOOGLE, why? $$$$$$$$

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Google Inc.
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Registrar Name: Markmonitor.com
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Administrative Contact:
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Google Inc.
1600 Amphitheatre Parkway
Mountain View CA 94043
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Technical Contact, Zone Contact:
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Google Inc.
1600 Amphitheatre Parkway
Mountain View CA 94043
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Created on..............: 2000-07-31.
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Record last updated on..: 2011-06-29.

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MarkMonitor is the Global Leader in Enterprise Brand Protection.

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Visit MarkMonitor at www.markmonitor.com
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Editor said...

Dear Anonymous Computer Genius from 8/17/11,

Welcome to the Internet! Hope you had a wonderful time on your first ride down the information superhighway.

Now that you have logged onto the Internets/Interwebs for a second visit, please direct your good eye to the URL at the top of your browser. (The browser is the screen that shows you all of the pretty pictures and big confusing words.) You will see Netflix Underground has a blogspot.com domain. It is sad to see your conspiracy theory die out so quickly, but you should be aware Google owns all blogspot.com domains and gives them out for free to anyone who wants one. This has been common knowledge to virtually every experienced Internet user in the world for several years now.

Welcome to the party, and have a nice day. It is so good to know AOL is still signing up new subscribers.

Anonymous said...

^ Thanks- I just had my first laugh for the day reading that post :)

Anonymous said...

So sad I am now forced to give up my Netflix service. I have been a member since 2007 and enjoyed the convenience of dvd/streaming. No way to justify the 60% increase so I will look into other formats for entertainment. They had a great thing going and a loyal customer in me, but pure greed leaves me no choice but to spend my money elsewhere. And so I will...