News

Netflix to raise prices…again

Posted by: Dan at 7/13/2011 2:29 PM
It seems like just yesterday (it was actually effective January 2nd, 2011) that Netflix tagged subscribers with a $1-$2 fee increase across all of their pricing tiers.  They also created the $7.99 unlimited streaming-only tier for those that didn’t want to deal with physical discs.  Those of us that thought his would be the only price increase in 2011 were a bit surprised by the e-mails that have been coming in droves to Netflix subscribers the last few days.

Basically, Netflix has decided to separate their streaming and mail-order businesses into two services that you can get individually or combined.  The problem is that the people that like to get disc-to-the-door service will be the ones getting screwed on this decision.  My personal Netflix account ( DVD, Blu-Ray and Unlimited streaming) will see a whopping 50% increase (it is actually closer to 61% since Jan 1, 2011) effective September 1st with my combined charges going from $12.99 - $17.99 a month.  I am sure the other pricing tiers will see a similar increase.

Unfortunately, Netflix is pulling a fast one on all of us.  By “assigning” the price increases to the disc-to-door portion of their business, they can point to increase in postage, fuel, labor etc. and reap bigger profits while not working on getting streaming content delivered faster and longer to their subscriber base.  I would pay that extra $5 in a heartbeat if that meant that movies and TV shows would stream within a week of release, but this appears to be a profit grab with a built in excuse to keep the wolves at bay.

Personally, I will have to think about keeping my disc-to-door subscription as an extra $5 a month for discs seems a bit ludicrous when Red Box (or other providers) will take care of my cravings quicker, cheaper and get me more movies for the same dollar.

Netflix needs to be careful with these rapid price increases, as the same subscriber base that helped them put Blockbuster out of business can easily turn on them and take them back to their old monikers of “Netsux” or “NetDix”.