What Did You Do About Netflix’s Price Increases?

Now that the initial shock of “ohmygod, how dare they increase their prices by 60%” has worn off, how do you really feel about your Netflix subscription? I have to say that I think Netflix’s concept is outstanding. In 1999 when Netflix first launched, it was a subscription-based digital distribution service that probably none of us were members of. Over the next decade, Netflix became a household name as a provider of on-demand internet streaming media. With over 10 million subscribers and over 100,000 of various movie and television titles for its customers to choose from and continuing to grow at record speeds.. why would you not subscribe to their services?

How does it work? Original, you would select what movie that you desired and that movie was mailed directly to your house in a neat little red envelope. When you were done watching the movie, you just popped it back in the mail in the same envelope and Netflix would send you the next movie in your queue. No due dates, no late fees, no shipping and handling fees and no trips to the movie store – just a flat-fee unlimited rental service straight to your door. Then, Netflix expanded on their original business model and started offering instant streaming of movies and television shows online over the Internet through their “Watch Instantly” option. This was a big step for them, but despite current contracts, a lot of the streaming selection is limited and outdated. (note: still a win on some levels as I got to see every episode of Arrest Development start to finish – highly recommend it if you haven’t seen it yet!)

So what’s the fuss all about? With Netflix announcing that as of September 1, 2011 there will be new price changes for its existing customers. The price plans would essential be a 60% price increase on its combination DVD and streaming plans that were mentioned above. Now, I believe that its completely understandable that the price of Netflix’s services were bound to go up at some point due to new licensing agreements and the company wanting to add more and more titles to its impressive collection, but 60%?!? How does this break down for the everyday person? Just think about it this way..

If you subscribe to the “Watch Instantly” streaming only, it $7.99/month x 12 months = $95.88/year.
If you subscribe to the “Unlimited DVDs” only (one DVD at a time), its $7.99/month x 12 months = $95.88/year [$11.99/month for 2 DVDs at a time]
If you want both the “Watch Instantly” and “Unlimited DVDs” (one DVD at a time) together, its $15.98/month x 12 months = 191.76/year [$19.98/month for 2 DVDs at a time, $23.98/month for 3 DVDs at at time and $29.98/month for 4 DVDs at a time]
Or a limited plan of 1 DVD out at a time with a limit of 2 rentals per month, its $4.99/month x 12 months = $59.88/year.

None of these plans seem significantly outrageous to me. I guess the question is personal though, how many DVDs do you actually watch per month? Would the price that is stated be worth your money? In our household, my fiancee and I were living in separate states for a few months while we sorted out our move. Since he works odd hours, he would generally watch a movie when he got home from work. I did not have a DVD player at my place, so I generally used the “Watch Instantly” feature on my laptop. For us, we had the Unlimited streaming plus Unlimited DVDs 3 out at a time. This worked great for us at the time, but given the price increase and the fact that we are actually living under the same roof once again, we have decided to drop our package to Unlimited streaming plus Unlimited DVDs 1 out at a time. It seems more economically sound for us and still allows us to request the movies that we would like to see that are not yet offered in the “Watch Instantly” feature. That is the plan that fits our budget and will satisfy our entertainment needs! What about you? Have you changed your Netflix subscription at all? Did you outright cancel it?

UPDATE on 9/22/11:  Eddie was right, he had a feeling that this was just the beginning of more changes that were going to be coming to Netflix!  This past week, Netflix announced that it will split into two companies.  Netflix will still manage their online streaming network and a new division will manage their DVD services called “Qwikster.”  I feel that a split is NOT the end of the world and maybe it will allow each company to focus more on the needs of their customers.  On the plus side, there were no additional price increases with this announcement, just the confusion over having to now manage two accounts and have two charges on your statement for each service.  Does anyone feel as if this will make them re-evaluate their services with Netflix?  Will this lead to more cancellations?  Any other options to use for these services?  I would suggest Redbox since I am a financialite, but I have to say that I continuously forget to return the damn DVDs and always get charged a little extra each time I rent there.  I prefer Netflix as I can just drop them in the mail and be done with it!

12 Responses to “What Did You Do About Netflix’s Price Increases?”

  1. […] How did you react to the price increase from Netflix? […]

  2. […] How did you react to the price increase from Netflix? […]

  3. I cancelled my Netflix Service and switched to HULU plus. Being in college, TV is WAY more important than movies that I didn’t even know existed with my online streaming only account.

  4. Miss Katie, do you like HULU? How does it compare in price to Netflix? I’m intrigued and wonder if this will be a major player against Netflix in the near future.

  5. I had streaming plus 2 DVDs (used to be $14.99) so when the price increased I changed it to unlimited plus 1 DVD which is now $15.98 per month. So while I am getting less for my money, at least I’m not paying much more.

  6. What you ignore though is the not-so-hidden ‘staggering’ of DVD sending to heavy users, which could turn your one DVD at a time plan into one DVD per month, depending how quick you watch them. The quality of the streaming service is in question as well. They offer HD, but its not ‘true’ HD. Not to mention streaming is only good with a very solid internet connection (but buffering could still be an issue). On top of all that, their stream offerings will be VERY limited now that their deal with Starz is officially over. Plus, this doesn’t even cover the fact that ISP’s are working in GB caps on customers, meaning if you stream too much they could charge you extra or actually cut your service off completely without warning.

    I know that paragraph comes off as a ‘negative nancy’ type rant, but they’re all justified arguments. In short, for now, Netflix is fine. But these price increases are just the tip of the iceberg regarding the customer-unfriendly changes that are rolling out.

  7. Eddie, you are completely right – I feel like this is only the beginning as well. I think Netflix will implement more increases over the next year. From a financial standpoint, I feel like we need to determine whether or not we will pay for them at that point. From a per month standpoint, I always think “well its only $20” but over the course of the entire year, it adds up! Thanks for your input!!

  8. 4 DVDs a month with an increase is reasonable enough. I do hope Neflix would not have any increases in the future especially that there are a lot out there that offers lower prices. I hate thinking of transferring since I like the quality Neflix is providing.
    Christopher recently posted..online dating book

  9. Chris agrees that the increase is reasonable especially for the 4 DVDs a month based on the quality that Netflix is providing to him and I would have to agree on the quality. I like their concept and am fine paying for it now, but if there are additional price changes I might have to rethink if its worth it!

  10. There are tons of good tv shows to choose from to say it’s the best. No matter what is said though, there is no doubt that this show ranks #1 of all of them. Yes, there are shows that are a bit older but this one still has charm. There is comedy, humor, and a little darkness, easily moving it up to the top. They just don’t make them like this anymore.

  11. I finally cancelled my membership completely. The movie selection was getting so bad. You have to search through so many low budget, bad movies to find anything good. I got some good use out of it at first, but i just completely stopped using it.

  12. Nice post very good read :)

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