As most customers have read by now, Netflix announced price hikes yesterday for subscriptions that include both unlimited digital streaming and unlimited DVD/Blu-ray rentals. Realizing my existing Netflix plan would increase by 60% come September, I went ahead and preemptively canceled service. It’s not solely the cost, as there are frequent occasions where I blow more than that $6 differential at a single Starbucks sitting. Yet, it’s the perceived value… which is now significantly diminished. Geoffrey’s comment hits the nail on the head:
I think the main thing that makes this increase hard to swallow is there’s no attempt to show us where the added value is as the consumer. If they were going to announce a massive increase in the streaming selection, then I could accept the argument that the service needs to be unhooked from the DVD rentals. But, as it stands, Netflix hasn’t attempted to show us any value for us paying around 60% more (in many cases).
Look, we know Netflix’s expenses are rising and it’s their responsibility to deliver value ($) to the shareholders. But the reality seems to be a stagnant or even weakening online streaming service for customers. Netflix can’t afford new releases beyond low definition Starz content… with titles now possibly subject to extended release window delays or downright missing in action. On the DVD front, Netflix’s disc-only plan pricing is not unreasonable. However, Netflix’s physical media customer experience may also be on the downswing, as we see reports that suggest Netflix purchases fewer discs these days resulting in longer waits. Additionally, the $2 Blu-ray surcharge rubs me the wrong way. Again, it’s perceived value. And I’ve got enough alternatives to easily move on when provoked. Who sends out an email saying service can be “easily” canceled? Done!
Unfortunately for Netflix, they’ve probably misread the situation. The heavy users, who incur the most costs, will remain. Whereas the revenue-generating folks like me, who stream very little and have held onto the same DVD for months, will depart.