Netflix’s Bright Idea Of Raising Prices Has Failed Miserably
There is outrage in the streets of America!
No, it’s not over Obama‘s jobs speech. People are pissed off about Netflix raising the price of their subscriptions and they are letting their voices be heard. Thanks to quite a bit of cancellations due to the increase in price, Netflix saw its stock drop 17% today. How’s that for the consumer voicing their displeasure and it actually affecting a company?
For those of you not aware, Netflix decided that it would be a great idea to spike their rates up 60% in order to maximize the profit off of their growing base. The shift in pricing had current subscribers steaming; and for good reason, too. While Netflix online streaming has been a massive benefit to users, the company is still behind in the actual DVD race as Redbox and Blockbuster continue to boast having new releases 28 days before Netflix. So what did subscribers do? Cancel the DVD portion of their service and basically tell Netflix to kiss their asses. In all honesty, who wouldn’t be mad at an increase of 60% in anything. If what I bought yesterday was $10 and now it’s $16, that’s a pretty damn good spike.
Because of the increase, Netflix is projected to not see a subscriber increase for the first time in the past two years. That’s great news for Blockbuster, who has been scratching and clawing to stay alive in the rental race. But the real question is what will Netflix do now? Will they lower prices or just keep on chugging along?
Better question, do you still have a Netflix account?