Netflix Deflects Rage Over Price Increase 722
oxide7 writes "Netflix provoked an unprecedented outpouring of backlash across the Internet as the company unveiled plans to raise prices on its movie-rental services. The company said it would raise the Internet-plus-DVDs-in-the-mail plan from $9.99 per month to $15.98 per month late Tuesday sparking protests and rage across the subscriber base. Netflix brushed off the criticism however. 'We knew there would be some people who would be upset,' company spokesman Steve Swasey said. 'To most people, it's a latte or two,' he added."
No rage, just a lost customer. (Score:5, Interesting)
Re:No rage, just a lost customer. (Score:5, Insightful)
Let them drink Latte...
My god! The stunning arrogance of the McMansion aristocracy.
Re:No rage, just a lost customer. (Score:5, Informative)
The Thank You Economy... NOT! (Score:5, Informative)
You're damn right! Latte? Latte? Arrogant little shit, people (like me) are pinching pennies cancelling even basic cable in the tight economy already trying to keep a "normal" life going with a $10 spot to Netflix. I can go to Redbox, Steve Swasey, you little asshole and get almost 3 DVDs a week! Netflix was mostly to keep my CHILD entertained with kids shows, but fuck it, it's just a latte to you, right?
Sorry for the cursing, but that mother... needs to read The Thank You Economy by Gary Vaynerchuk and get some goddamn manners! This is a less for how NOT to conduct business when everyone has a direct line to 500 friends on Facebook, Twitter, G+, etc! What a retard! I hope the fact that he is spokesman for Netflix will make future employers go, "Ah, so I guess I don't have to ask why you're now looking for new employment. Well, we don't find you qualified for spokesman, but we do have janitorial."
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Netflix is showing signs of not-quite-competence all over the place. Not-so-bright UI design on the new web site, bad usability testing on the new design, and inept PR spin "all our testers liked it, what's wrong with you?" in response to the complaints. Now there's this huge price hike that they're trying to spin as "lowest prices ever" (as if we wouldn't notice that only applies to much less service), and this "let them stop drinking latte" nonsense. If I'm ever in a position again to review job applic
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If I'm ever in a position again to review job applicants, and I see a significant stint at Netflix on someone's job history, I'm going to have assume that they didn't know how to do their job, either.
Just what we need, yet another retarded manager. If you can't be bothered to evaluate the person rather than jumping to conclusions based on extremely tenuous circumstantial evidence, your company would be stupid to have you reviewing any applicant.
Re:No rage, just a lost customer. (Score:5, Funny)
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Scrooge McDuck? Is it really you?
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Yours truly,
Flintheart Glomgold
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A couple latte's cost from you, $40 more to fill the tank every week, an increase in the cost of food because they are using corn to make fuel, the price of education rising dramatically...after a while you miss a car payment or a house payment because you don't have the cash or you are forced to put this stuff on credit which costs even more in the long run. Then what? And what's the increase in value for the extra cost?
At least a latte has some nutritional value and coffee had a reported medicinal value
Re:No rage, just a lost customer. (Score:5, Insightful)
My god! The stunning arrogance of the McMansion aristocracy.
I don't know if it's arrogance or just plain ignorance. They figure that since they drink a latte every morning, everybody does... "Right? Right guys?"
Remember the /. story about how 'most people love our new website redesign'?
If I was a Netflix customer, I'd drop them. If I was a Netflix shareholder, I'd drop them -- not because of the price increase, but because of the sweeping generalizations that seem completely untrue "most people this" and "most people that". There's a serious case of out-of-touch-with-consumers there. Maybe someone who runs a marketing/consumer-research firm has a jackpot just waiting for them...
Re:No rage, just a lost customer. (Score:5, Insightful)
The fact is that shipping through the mail is just really expensive compared to streaming. Netflix needed to make this decision sooner or later, and I don't blame them for doing it. They've been talking about how expensive the mailings are for a long time now.
Re:No rage, just a lost customer. (Score:5, Insightful)
Re:No rage, just a lost customer. (Score:5, Insightful)
Re:No rage, just a lost customer. (Score:5, Interesting)
Mod parent up. This is definitely about the content providers wanting more money. The reason the Sony movies were removed is because they had hit a contractual cap and Netflix was unable to offer them anymore until a renegotiation followed. At the renegotiation, the content providers are all too aware of the soaring Netflix profits and stock price and are demanding more money. My actor friend in Hollywood (an armchair industry analyst) has been moaning for months about how the studios let Netflix get away with the content too cheaply.
I'll be canceling my account too for a variety of reasons:
1) The streaming selection has been awful lately. Like really awful.
2) The site redesign really sucks. You have to hover over a movie to see the rating.
3) The recommendations for me are ghastly. Maybe it's because my girlfriend has been watching too many movies.
4) I've received scratched DVDs and had streaming movies drop repeatedly (despite my 10Mbps connection). I have yet to receive any compensation or even an apology for these service failures.
5) No video rental on demand? WTF??
6) Yes, the price increase.
Re:No rage, just a lost customer. (Score:5, Interesting)
What I hate is how movies appear and disappear and the movies I really want to watch are nearly impossible to find online.
Of course there's always other options... It's always nice when the illegal option is both cheaper, more convenient and a better product.
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Of course there's always other options... It's always nice when the illegal option is both cheaper, more convenient and a better product.
I'm a babyboomer (ie, not a kid by any means) and I have been renting NF for about 8 yrs now. I choose to rent and pay a bit of money since it seems somewhat fair. I could have chosen to not pay and download, instead.
fastforward to today. I'm feeling less and less hospitable toward MPAA guys and everyone connected to it. push me further and my goodwill will disappear.
Re:No rage, just a lost customer. (Score:4, Funny)
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Until recently they had no competition. Did you mean Blockbuster? Please. A traditional video rental store is no competition for Netflix, at least not anymore than the yellow pages are competition for Google.
They are only now facing real competition, from Hulu, amazon, google, and on-demand services offered by cable companies.
I'm not happy about the price increase, but I am hopeful that it allows them to work out better content deals.
Re:No rage, just a lost customer. (Score:5, Insightful)
Part of me wonders how much of the cash grab is coming from the content providers/movie studios though. Now that they see netflix is the path to the customer they decided to try and play a bit more hardball. That's just my speculation though, impossible to say for sure.
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Re:No rage, just a lost customer. (Score:4, Insightful)
From what I've read, NF is going to get pounded by renegotiated contracts with the studios next year. So this move appears to be preparation for "paying the piper". I don't think it was a cash grab.
Netflix is still handling this atrociously from a PR standpoint. If it's due to the studios demanding more money (reports are it'll be considerably more, not a small amount more) then they need to tell their customers that. "Sorry, but licensing costs are going up as we have to renegotiate streaming deals with the various studios so this price increase has been forced on us from outside." Then consumers will direct their anger more at the studios, instead of Netflix. Saying something idiotic about the price increase being "a latte or two" is more or less guaranteed to make the PR situation WORSE. Much, much worse.
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You're aware the USPS shipping costs have increased about 25 percent in the time Netflix has been in business, aren't you? That makes a huge difference in profits, especially when you're trying to expand your market.
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Economy of scale often takes into place. As Netflix grows bigger Mailing becomes less profitable to a point where it cost more to ship a DVD where it use to be their bread and butter.
A typical Manager can directly manage 8 people effectively. So every 8 people hired they need a new manager. every 8 managers there needs to be a new upper manager and we continue.... We can assume that each management level will get paid more then the one that is under them. So as the business grows you get more bureaucrat
Re:No rage, just a lost customer. (Score:4, Funny)
Wake up and smell the cash grab.
Heh yeah, back in my day big successful companies were philanthropic.
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Because you might stream 50 movies a month, but you're not going to rent more than about 15 through the mail in a given month, and that's if the stars align and USPS has a two day turnaround....
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I read a theory yesterday that under the $9 grouped pricing scheme the mail-orderers and the streamers got counted together for their streaming costs. This move will likely split people into streamers or mailers. That shrinks the pool of potential streamers which lowers their costs.
As I understand it, at least some of their contracts with the content industry force Netflix to pay some amount multiplied by the number of potential streamers. They are trying to save money here.
I'm just repeating a rumor though
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They want to do that but there is a lot of outrage. And if the post office cuts back to less than 5 days a week there will be legal problems elsewhere since overdue bills that come late in the mail can't be overdue by government decree.
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Trouble is....their selection of movies to stream is pathetic. I would find it VERY difficult to find 50 of them I'd be interested in watching from the streaming collection.
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(I work at Netflix)
When I was underemployed a few years ago, I made a game of trying to get as many DVDs from Netflix as possible. I figured out at some point that the maximum possible number of DVDs you can get in an average 30-day month is 10*X, where X is the number of DVDs you can have out at a time. So the best-case scenario for a 3-at-a-time plan is 30 DVDs a month.
(I mentioned this when I had my second interview here. The person I was talking with confirmed, and noted we had 8-at-a-time subscriber
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Re:No rage, just a lost customer. (Score:5, Insightful)
Re:No rage, just a lost customer. (Score:4, Interesting)
don't count on finding low cost channels for content from the studios to last forever
Don't count of the value of the studio's assets to remain high forever. When cable appeared the legacy networks found themselves competing with new content that emerged exclusively on the new medium. Today the old networks are just slots in the basic cable lineup.
Streaming is a true a la carte platform, far more liberal than cable/satellite. Anyone can knock together a Roku channel, contract with a CDN and deliver broadcast quality content to the world. No cable company need be dealt with. No big content gate-keeper gets a cut. That is an irresistible temptation to entrepreneurs.
Eventually new and popular content will emerge that is exclusive to streaming. Competitors for staple cable channels will appear. Note that you can get live Al Jazeera on a Roku, but not CNN et al. The old cable staples will never truly make the transition. They'll have to be bought by those who do.
Streaming is absolutely fucking excellent. The ultimate potential of streaming is way better than anything the traditional cable/satellite model offers, and it simply doesn't need Sony/Time Warner/Disney to succeed. As the big content owners of the world realize that consumers are happy with what has independently emerged on streaming media they'll have to compete with it. That is when the prices will be rationalized and the big content libraries get commoditized.
In the immediate future the big content owners will play their games and try to squeeze the new medium for all it's worth. All they're really doing is creating opportunities for competitors. Streaming dominance with endemic competition is an inevitability. It will be the premier platform inside of ten years and all else will be legacy prizes lined up for the auction block.
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That is, the studios thought that MOST people bought DVDs and saw movies in theaters and Netflix was just there to "mop up" the small fraction of the market that didn't pay through the other channels.
That was true for me for a long time, but they stopped that themselves when they came out with Blu-Ray at much higher prices. I didn't want to buy Blu-Rays for twice as much, but I also didn't want to buy DVDs when there was a Blu-Ray, so I turned my NetFlix account back on.
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Re:No rage, just a lost customer. (Score:4, Informative)
Personally, I think it's a smart move. Netflix has had by far the greatest success monitizing the content delivery business (excluding the wire-to-your-house providers like comcast or AT&T). Google and Hulu still have to figure out the business plan (Youtube is popular as shit, but hard to make money on). This gives netflix a chance now to try and raise margins, in order to try and gain enough capital clout to fight with their likely ultimate rivals for exclusive content, Comcast, AT&T, etc.
The need to shoot for the moon now and try to get to the point where they can square off against the 800 pound gorillas, or they'll end up like Tivo.
Inflation (Score:2)
That simple.
You're going to stop being a customer all over the place.
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I have Netflix but I hardly ever used it, so when the notice came out I switched to their 4.99 plan. Its slightly less than I use now, but meh.
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yep, cancellation on the way.
Netflix is raising prices and reducing access. Since when did they think this would be a good idea?
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Same here. They're fooling themselves if they think that only a few customers are upset about the outrageous 60% price increase. Only a small percentage will actually say anything. There are a lot of us who know that our complaints will be ignored.
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For me, it's a math problem. I moved a year ago, and we decided to drop cable TV. Instead, we subscribed to Netflix, and regularly use Amazon Instant Video and PlayStation Network.
Look at it this way: Looking at the cost of cable TV (at our old house, but it's about the same here) it was about $80 per month.
But without cable TV, we're watching (mostly) the same shows from Amazon and PSN for $2 per episode. We watch movies and catch up on series (that we didn't watch the first time around) using Netflix. Str
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If you can't afford a 5$/mo increase you probably shouldn't have a Netflix account in the first place.
I disagree with this. Of the utilities I would drop for economic reasons, cable would be first, before my high-speed internet. Netflix makes that internet a lot more valuable in terms of entertainment content. I can get a huge amount of quality programming from netflix for a month for less than going to a first run movie with my wife.
People with money tend to bitch and moan a lot when they hear about poor people with cable TV or an XBOX, but the fact is those things become very valuable and provide a
Marie Antoinette (Score:2)
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Hey Swasey, ya want one lump, or two, with yer latte comment?
Re:Marie Antoinette (Score:4, Insightful)
A misattributed, misunderstood literary anecdote used to draw a supposed parallel between starving peasants and Netflix users? Ah, Slashdot, you never cease to disappoint me!
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Meanwhile, at the MAFIAA (Score:2)
Cyberterrorist hackers are pilfering "a latte or two"...wait...that doesn't sound scary enough.
How to destroy your internet based business (Score:2, Insightful)
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Netflix is trying to put the DVD side with a price to adequately cover its costs (which are substantial), and trying to push as many users as it can to the streaming side. I've been expecting this for a long time, and I think it was a good decision.
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Netflix is trying to put the DVD side with a price to adequately cover its costs (which are substantial), and trying to push as many users as it can to the streaming side. I've been expecting this for a long time, and I think it was a good decision.
While I knew they were going to emphasize streaming over DVD, I wish they had treaded more carefully. They won't admit it, but their PR department is (or should be) in damage control mode.
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It is still Cheaper than Cable (Score:5, Insightful)
It still has no live news or live sports (Score:2)
Re:It still has no live news or live sports (Score:4, Informative)
Get some rabbit ears and get your live sports in HD for free
Production values of torrentable works (Score:2)
Latte Defense (Score:5, Insightful)
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Because in my little corner of the planet (Victoria BC) there is a 10 person deep line up for a latte at every single one of the hundreds of espresso shops every morning. That's why.
Justified or not people buy lattes.
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Exactly, I've found that if i cancel my healthcare I can afford cable and netflix, and still get a daily latte.
The update does not make sense (Score:5, Insightful)
Most people are probably not really angry because of the money increase, as there are few good rivals (not for long, I hope), but because nothing of value was added to the service to justify the increase.
I bet most people would be happy if the price increase would have arrived with a 100% streaming coverage so people can stop relying on DVDs, or maybe some new cool feature.
Instead, the UI has been somewhat degraded for some, and now the service is almost twice the price. It's not just "some people", I'm sure _most_ people are not happy with the "update".
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Re:The update does not make sense (Score:5, Insightful)
I bet most people would be happy if the price increase would have arrived with a 100% streaming coverage so people can stop relying on DVDs, or maybe some new cool feature.
If you want 100% streaming coverage, $7.99 is way too cheap. Most people are simply being irrational here. The cost of doing business is going up for Netflix, so the cost to pay for the service is going up with it. Netflix gave us all way too good a deal for way too long which has caused most consumers to turn into spoiled little brats.
Re:The update does not make sense (Score:5, Insightful)
Yeah, $8 a month for unlimited streaming is a fucking steal. Assuming you watch only an hour a night, you are paying all of 26 cents an hour for your entertainment, a better deal than just about anything else out there.
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Yeah, $8 a month for unlimited streaming is a fucking steal.
Indeed. I've been streaming for a year with Netflix and keep thinking, "I can't believe this is only $8/month."
I'm not bothered by the increase in price, since for me it would be worth a higher price. I am, however, bothered by the change in the UI. My computer is not a TV and I expect to be able to do more with my computer (since i have more input options than just a remote control). I also don't like not being able to see the titles and rati
You are not looking at the NetFlix I am looking at (Score:3)
They're getting all Star Trek series. They have almost all of Bablylon 5. They have every episode of every Stargate series. They have Lost. They have every episode of Futurama through Season 5. They have all but the current season of Doctor Who (2005 series).
WTF NetFlix have you been looking at?
Just Bizarre (Score:5, Insightful)
$7.99 is way too cheap.
To me that is the most bizarre aspect of this price change. If what you want is just streaming or just DVD, the new plan is very inexpensive. AFAIK, it is the lowest price that Netflix has ever offered. But if you primarily use one and occasionally supplement it with the other, having to pay double the price isn't worth it. So the natural reaction of everyone I know personally, and the vast majority of posts I have seen on the internet is to drop one of the two. It is like Netflix is begging us to give them less money, and presenting it an a manner that is pissing everyone off.
What is even more mind-boggling, is that this ability to supplement one with the other is the one of the biggest advantages that Netflix has over it's competitors, and they just completely threw it out the window.
I understand that the price for streaming would have to increase over time as Netflix renegotiates deals, and the selection increases. I never expected it to be included as a freebee with the DVD service forever, just during it's teething years. But I can't believe that the average person who signs up for both DVD and streaming would use both just as much as the average person who only signs up for one or the other.
If they really believed that the majority of people would keep both plans at the higher price, then their market research people need to be fired.
Re:The update does not make sense (Score:5, Interesting)
I'm a netflix subscriber, and I sincerely don't care paying more for their services. What I think motivated the rage, was rolling out a price increase as a "feature". Instead of just saying they will be increasing the prices ("The $10 plan will be now $16, BUT you have the option of going only streaming or only DVDs for half the price"), they went "Hey! Great news, we are splitting the plans so everyone is happy! Your plan will no longer exist and you'll have to pay extra! BTW, Everyone must switch over in September".
If there's one thing you don't want to do you your customers is making them look like idiots, and tell them to pay more with ultimatums. That was sort of 3 strikes on their single blog post.
They don't get it (Score:2, Informative)
This isn't about the use of disposable income. It's about having a huge increase in cost with absolutely nothing in return. Now, if they'd said that they'd finally ripped their DVD collection to streaming, or even somewhere near it, I'd listen. Or perhaps they're finally going to get more recent titles in line with Blockbuster or Redbox. But they're not.
This is a pure, unadulterated money grab. So I'm grabbing mine back before they get the chance. Canceled my service yesterday. And per http://www.hac [hackingnetflix.com]
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Re:They don't get it (Score:5, Insightful)
If 2/3rds of the user base stays with a 50% price increase, then they've increased revenue while decreasing expenses (less bandwidth usage).
Question is whether it'll stay at just a third leaving.
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If 2/3rds of the user base stays with a 50% price increase, then they've increased revenue while decreasing expenses (less bandwidth usage).
Question is whether it'll stay at just a third leaving.
At the same time they lose market share, which hurts their long-term prospects. It makes it harder for them to grow revenue and easier for their competitors (iTunes, Amazon, Hulu) to grow strong.
Most investors would see a 1/3rd paying user-base leaving in this span of months as very bad. Revenue isn't necessarily going up; there are lot of households who will stay but go from 2 DVDs to 1.
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I doubt their infrastructure costs are proportional to the number of users.
60% (Score:2)
A couple bucks more is exactly the wrong way for them to be looking at this. It is a 60% price increase (A little less for me on a 2 BluRay plan) but they need to be offering real improvements to service in exchange for this level of price increase, they need to be promising faster new releases on disc and better streaming options too not just now we want 60% more (they could get away with 25% more, but this is excessive.) I'll be dropping to the 1DVD (no more BluRays for a while) w/ streaming plan in res
Perception (Score:2)
As a Canadian, the only deal available to me is $7.99 for streaming only. I looked over the catalog and decided there was enough there to be worth $7.99/month.
So what's not worth $7.99 to Americans, the DVDs or the streaming? Given that your streaming library is more extensive, I assume it's the DVDs. Cancel that and enjoy the streaming.
I plan to stream a few episodes of a series I'm watching over 3G from my hospital bed later today.
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So what's not worth $7.99 to Americans, the DVDs or the streaming?
The streaming. I'm not a Netflix subscriber yet, but I imagine that once a subscriber has finished watching movies that his friends have recommended, he ends up with a lot of movies that aren't available on streaming. How should one watch those movies?
Streaming would be fine (Score:2)
I'd be super happy with the streaming only if they have more than a few titles available for streaming. I'd bet there would be a whole lot less rage if they said:
1) we are splitting the plans and raising the rates on the combination. But:
2) we are vastly increasing your streaming offerings so many of you will save money by streaming only.
The streaming offerings are crazy at times. For example they will have three of four disks of a series available for streaming, but they 4th is by mail only. WTF?!
I've
I jumped ship. (Score:2)
"Netflix raise"? (Score:2)
FTFS:
The company said it would Netflix raise the Internet-plus-DVDs-in-the-mail plan
What, exactly, does it meant to "Netflix raise" the price of something?
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What, exactly, does it meant to "Netflix raise" the price of something?
It means to increase it by such a large percentage that you need dental work when your jaw hits the floor.
2 times in a year (Score:2)
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They have the right to charge what they wish . . . (Score:2)
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Agreed, though I'm going to cancel my DVD and keep streaming. I only get (got) a DVD maybe three or four times a year, and while the math may not back me up, it was worth it to be able to get one whenever I wanted. Now not so much. I'll drop that service, keep streaming, and if I need something not on "Instant," I'll rent it on Amazon's streaming service.
I'm willing to bet that a significant number of people will drop the service that they use less often (mail or streaming).
already cancelled (Score:2)
I cancelled netflix last winter after the prices went up 50% in a year...
No Competation = No Worries (Score:2)
Mailing Costs (Score:2)
Netflix is not interested in mailing you DVDs for $2 a month. From their point of view, if you have streaming for $8, the correct price for adding mailing is $8. You may think of it as paying $8 for mailing and expect that you should be able to get streaming for an extra $2, but Netflix doesn't think of it that way. If you want them to maintain warehouses full of DVDs and mailers and pay for postage, they want you to pay for all that. Their price is $8.
I gave up mailed DVDs months ago when the price wen
It's not that the price increase is so great... (Score:4, Insightful)
Not Worth It (Score:2)
I guess Netflix would rather not have the money I was paying for that part of the service I rarely used.
Anti-competitive behavior (Score:5, Insightful)
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Yeah, I bet you did no bitch when they introduced more movies, or the ability to stream films without increasing the price uh?
"Why did you add more features without charging me more??!!!!11111"
I would pay the 10 Euro without hesitating if a service like netflix (and not the joke that is LoveFIlm) was avialble here in Europe.
Went streaming only awhile ago.. (Score:2)
But what I might cancel over is the horrible new website... ...
I mean, the sorting is gone, they lost at least a thousand ratings I'd marked, and apparently no longer have any suggestions for things I should watch for Drama... except for things I specifically have marked as "Not Interested".
You're just a consumer ... (Score:2)
Signed,
Your corporate overlords
Re:You're just a consumer ... (Score:5, Insightful)
Oh grow up, it's just garbage entertainment. When you're really abused is when your food prices start going up, or the bank charges a mysterious fee, or you suddenly can't find work. Or, for that matter, when your wages stagnate while the cost of living continues to increase over the course of decades.
That's when the real overlords laugh the hardest, knowing that your children will consider it a privilege to serve them their own siblings' flesh after you're gone. Netflix is just a sideshow.
How much of this is Netflix vs.content makers? (Score:2)
I know there has been a lot of outrage over Dexter disappearing from instant queue. However, that was the decision made by Showtime, not Netflix. Showtime is going to start streaming Dexter and Californication exclusively via their new streaming service, Showtime Anytime.
I also wonder how much of this price increase will go towards extending their streaming library. I would suspect streaming licenses is more expensive than DVD rental licenses and content producers are increasing what they charge Netflix.
I a
culture of incompetence (Score:3)
Their public relations people clearly have the public relations skills of engineers.
Hardware engineers.
It's not the dollar amount, it's the percentage! (Score:3)
As a percentage of the old price, the new price is outrageous. This is like charging $0.75 instead of $0.15 for text messages and then defending it by saying that "to most people, it's like getting extra cheese on their burger".
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A raise of approximately 63%?