Netflix anybody?

Netflix Imposes 28% Rate Hike on Existing and New Customers

Personally, I will not pay for Netflix.  Standard definition Movies and Television that you pay for?  No thanks.  Anyways, there are a lot of people who have already jumped into this service and I just heard about this.

It appears the price hike does not apply in Canada because there is no mail-order option here.

While Netflix would like to hide rate increases under the garb of "better reflecting the costs of each" and giving its customers "a choice", what it really amounts to is the company passing along its increased costs of operations to consumers. Normally, that would be fine, but with consumers living under a recession that simply won't go away, and having the mindset that cutting costs is "the thing to do" right now, it's hard to get excited about what amounts to a 28% rate increase for those using both DVD-by-mail and services. Heres how it works for the unlimited 2-at-a-time plan:
  • Old rate: $17.99
  • New rate: $14.99 (DVD rental) + $7.99 (streaming)
The difference is 100 x [($14.99 + $7.99) / 17.99] = 28% increase
Now, while I certainly understand increased costs, what I don't get is the way Netflix wants to hide the cost increases under the guide of "splitting the services". It's true - if you only use one or the other, your costs just went down. But Netflix knows very well that the majority of its client base want both services. And that means increases of 28% or more as you see above.
There is a growing movement, led by disgruntled Facebook users that is screaming for the movie service to recognize they are potentially alienating consumers at a time when they need as much market share as possible.

One analyst said the company might be forced to retreat, but Netflix held its ground, with a spokesperson comparing the rate increase to the cost of “a latte.”

Few customers bought that line. The comment section on Netflix’s own blog entry about the price change hit the maximum of 5,000 posts. On Netflix’s Facebook page, members have posted 60,000 — and counting — responses. And on Twitter, “Dear Netflix” soon emerged as one of the top trending topics.  Mostly negative responses.

When the company introduced the streaming video service in the U.S., it offered it as an included feature on most subscription plans at no extra cost. Last November, though, it began offering a $7.99 streaming-only plan.

On Tuesday, Netflix announced it was separating its DVD and streaming video services. Subscribers who want to receive DVDs in the mail and access streaming videos will have to pay for those services separately. Instead of paying $9.99 to check out one DVD at a time and have access to streaming, customers will have to pay $15.98 — 60 per cent more.

Is it a smart move, designed to stabilize the growing costs of streaming licensing fees, or a cash-grab by a greedy corporation that sees an opportunity to reset its rates to benefit them in the short-term? Are you going to sign up or continue to use this service? or does this separation of services actually help you?

Personally, I believe it was only a matter of time.  In my opinion? drop it it you have it and don't bother if you dont. 

Well unless they start offering some more solid HD educational content.....