Netflix Raised Prices 60%. There’s Your Problem!

Yesterday’s blog post by Reed Hastings, one quietly posted on a Sunday, caused a mighty uproar by… Sunday. In fact, by the end of Monday, the post had almost 5,000 tweets, and 22,000 comments. That’s probably a world record – I’ve never been to a blog post where I was physically unable to read through all the comments!

People cannot believe that he apologized but didn’t give us anything back. People cannot believe that he’s truly splitting the services in two by creating Qwikster (the DVD-by-mail side of the business). People are incredulous!

Perhaps mistakes are being piled on top of mistakes, but remember and understand this – the fact is that no business has ever been able to levy a 60% increase on its loyal customers. Please, find me one.

It does not matter if this move made sense to Netflix’s management. It does not matter if their unsustainable business model forced them to do this. It does not matter that you can slice and dice this by just choosing one service for $7.99 (hey, that’s a 20% savings. Look what we did for you!)

Their loyal customers (SO loyal) did not see this coming, did not deserve this, and are vocally rejecting it. These customers are not a fickle bunch, forever changed by a free/freemium society fueled by free Gmail, Skype, Dropbox, etc. They were brand ambassadors, and a 60% increase (forget that it was only $6) was a big slap in the face. Netflix did not show them the love.

RATHER AWESOME POSTSCRIPT

Look at the lightbox popup window you get on Blockbuster.com today. Ouch!

Blockbuster lightbox popup

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  • iAmCloud

    Agreed! Hear hear!

  • Luvwatches

    I would add that they give customers nothing in return to raised subs. Arguably the streaming has lost some of its catalogue opportunities ie starz. And don’t get me started on charging me more for watching multiple streams. Then he announces the additional services in the mail order side is going to cost more. Just when blockbuster starts getting rid of those fees. U can now Exchange a movie for a game for free or a blu ray for free. They get their shipping turn around time better and I have no idea why anyone would use qwikster. Oh well, ship is going to sink fast if they don’t do something.

    • http://www.rizzotees.com/ Chris @ Rizzo Tees

      One thing I’d like to add: my DirecTV bill has been going up for years. While the overall service is likely better than it was years ago, they can raise my prices by a few bucks a year without giving me anything in return. THAT’s how to do a price increase