Angry Netflix customers hoping the company will see the error of its ways and reverse its recent price hike won’t be any happier with today’s news. Netflix announced its second quarter numbers today, but its earnings release was dominated by discussion about its price changes.
Reed Hastings, the company’s CEO, says the backlash over the price hike was anticipated and actually more subdued than his company thought it would be. Said Hastings:
“[The] noise level was actually less than we expected, given a 60% price increase for some subscribers . . . We knew what we were getting into.”
Netflix’s official statement in its earnings release had the same “that’s just the way it is” tone:
“It is expected and unfortunate that our DVD subscribers who also use streaming don’t like our price change, which can be as much as a 60% increase . . . Some subscribers will cancel Netflix or downgrade their Netflix plans, [but] we expect most to stay with us.”
Netflix went on to warn investors that the only impact from the price increase in the third quarter will be a negative one as its most furious customers cancel their subscriptions. The company stands behind its decision and its DVD business, however, announcing that it’s setting up a dedicated DVD division and will resume marketing its DVD-by-mail service.
Now that some tempers have cooled, it’s time to ask the question: Have you canceled your Netflix service over the pricing change? Will you? Is Hastings right to be so confident that any fallout from the increase will be short-term at worst?
(via CNN Money)
I will be ending my subscription in August. The price increase takes effect Sept 1 for those of us who were already members.
Only 1 more month and goodbye Netflix!
Same here…I’ll watch what I can till, the end of August.
i will more than likely just change it to streaming and get dvds from redbox… i hardly get any return on the dvd part anyways.. i’ve gotten maybe 5 dvds in the past few months. I’ve rented more from redbox in that time period. the streaming price of 7.99 will not change. and that is one heck of a deal considering the amount of movies and things my wife and myself watch on netflix.
I’ve already cancelled Netflix. I didn’t have enough time to watch the dvd’s I had & wasn’t really impressed with the streaming selection. A 60% rate hike made the decision easy.
We’ll be cancelling the DVD portion next month, as the price hike begins in September. We will keep the streaming, as it’s currently the largest portion of our TV watching besides Hulu.com – we dropped cable nearly a year ago. The streaming always adds new material so we always find enough to watch to keep us happy, and what we can’t find on Netflix streaming we find online. The DVD hike is too much to pay when we can get instant gratification with Redbox.
I cancelled but not because I think the prices are unreasonable. I’m just not willing to pay that much when I rent for free from redbox and bluebox with all the codes they put out — especially bluebox, which I’ve never had to pay for. I never understood how Netflix was turning a profit anyway with all of their overhead, especially postage.
I just downgraded to dvd only, the streaming was nice when it was included but I have Netflix for tv shows and most of what I wanted to see isn’t available on streaming so having to play extra for the ability to watch instantly wasn’t working for me.
a dedicated DVD division ??
What does that mean ?
I wish they would sell a “limited” streaming option for $2.99 or something.
As it is, I antcipate switching from my 3+ streaming to 4 DVDs & no streaming one month and 2+ streaming the next and then back & forth where I will only have streaming every other month. By doing this, my price increase is only 5%. I wont have streaming every other month but I will have 4 DVDs at a time. And if I get desparate to watch something on streaming, I can always watch crackle I guess.
Or I can switch in mid month and pro-rate that months portion of streaming.
As of September 2011, I’ll be giving Blockbuster’s DVD by mail service a try. Its interesting to note, that BB still has DVD titles not available @ Netflix.
Going to streaming only. Netflix will get $2 less a month from me.
I cancelled the dvd portion of the service immediately upon hearing the news. I already use redbox exclusively for new releases as netflix wasn’t reliable for these to begin with.
i will cancel the dvd portion like most i rent my dvd mainly from redbox anyway, but i will keep streaming from them because the weekends television sucks and there are only so many new movies every week, we have seen most everything in redbox all ready. at first i was very angry and thought about cancelling but after thinking about it, we only get like 3 or 4 dvds in a month, we stream most of the time so…. everyone have a bless day
Just cancelled the Netflix membership. It’s not worth it. Streaming has nothing else to watch, besides TV episodes. Better off with Redbox for DVDs.
We will cancel the DVD portion of Netflix before the hike takes effect. We already rented from RedBox, but now it will be even more. We have found that Netflix streaming isn’t very good on week-ends. Too busy for the bandwidth, I guess, but we will still keep it. It is a good deal & is great when the grandkids come over and for so much more.
I cancelled my Netflix today. They (Reed;CEO) thinks his $hit don’t stink and that all the PO’d peoples “Noise level, are less than expected”. I’ve gotten tired of it, there idea of “New” movies to stream came out 2, 3 yrs or more ago. Hulu and Redbox for me. Oh and I’ve been with Netflix since 2003…thanks pal.
Will cancel end of August also, outragous to pay those rates when I can rent from Redbox for free or $1.oo. I hope they go under!!
well whats your opinion on the netflix price increase for the streaming and dvd plan? personally we do not really care that much because if you really think about it, the more you pay for netflix the more movies they can purchase for us and in the long run subscribers will be happy once more. but maybe im wrong?
so whats your opinion on the netflix price increase for their dvd and streaming service? personally I dont really care too much because when you really think about it, the more you pay the more content they can purchase for us and in the end customers will be happy again. but what do i know?
I cancelled my unlimited-1-CD-out-at-a-time service but will continue with unlimited streaming. At $7.99/month, it’s still the best deal going!
Netflix is rightly forcing the end of DVDs for a good reason. The reality is that it’s time to get away from the “snail mailed physical disk” and move on to getting your entertainment “over the streaming pipeline”. Studios will have to make better deals for earlier releases to Netflix if they expect to get their content out to the public without a plastic disk.
Apple forced the end of floppy disks when they released their iMac (I think?) which lacked a floppy drive. Users were fuming at first – but quickly adapted. You can’t buy a floppy disk anymore. The same thing will happen here at Netflix. Postal Service delivery of DVDs is expensive and justly doomed.
Well then Reed Hastings, the company’s CEO, won’t be shocked when there is mass exodus this month!
I downgraded from 1 dvd/unlimited streaming to just streaming which is what our family used anyway. Got 30 days to watch Season 4 of Dexter before the switch!
I’m sad over the price increase, because I just joined Netflix last month. I will end my subscription at the end of this month. I’m a teacher, and my break ends this week. I don’t watch a lot of movies during the school year. Also, I have been renting 99% of my movies from Redbox since the first kiosk appeared on my side of town. I just hope Redbox will not turn to greed and keep their rental fees at $1 for movies and $2 for games. I also appreciate Redbox for offering their coupon codes.
I’m keeping my plan the way it is. 2 blu-ray and streaming unlimited for $23.00 a month is still a great deal and a lot cheaper than having cable or dish in the house. There was no way Netflix could keep charging the same prices and still make content deals. If you want to place blame, place it on Hollywood. The studios are the ones demanding more money for their “content” so they can pay the A-list actors and actresses 20 to 30 million a movie. The actors and actresses make that kind of money, because we rush to pay ridiculous prices at the theater. I guess we can also blame ourselves too.
Thanks to what netflix is doing they will be helping redbox make more money. Netflix will be losing so my people and money that all that business will be going somewhere and now it will move some of the other things up the ladder faster.