Netflix claims it was prepared for price hike backlash

The massive outcry of many Netflix subscribers over the company's decision earlier this week to raise prices by as much as 60 percent on some subscription deals was prepared for. At least that's what a Netflix spokesperson is telling the press. News.com reports that Netflix spokesman Steve Swasey states, "We tested, we researched, we analyzed. We knew what the reaction would be. We are not surprised. We knew that there would be some people upset by the service and with the price being adjusted."

The price hike, announced on Tuesday, separates the streaming and DVD mail order rental plans which means that customers who want both will now have to pay nearly $16 a month. Many Netflix subscribers hit the Internet writing and voicing their displeasure with this move and many said they will be canceling their subscriptions or at the very least change to just getting either the streaming or the DVD mail order plans. When asked if the negative response to the price changes might cause Netflix to change their minds, Swasey said simply, "These are our prices."

Netflix subscribers are also calling the company's customer service phone lines and it looks like, at least at the moment, it's hard to get through to a Netflix employee in a timely manner. News.com states that Rich Greenfield, a Wall Street analyst with BTIG Research, called Netflix's customer service number 35 times in two hours on Wednesday. He claims that the hold time for each call was between 9 and 15 minutes. News.com also confirmed with a Netflix employee that the company had hired extra people to man the phones this week.

Greenfield, however, says he was not happy with the responses he got when he did get through to a Netflix customer service rep. He states, "There was simply no promo or 'save' technique to offer us a discount to retain our business. This would appear to illustrate that Netflix is simply not concerned with the prospect of losing customers."

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29 Comments

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had a strange thing happen a moment ago.. wonder if someones trying to hack netflix. because for a moment I couldn't get to netflix BD/DVD section. it was all streams. Was able to get to my old instant play queue for a moment and printed that off. Right now I'd say Netflix is looking like the gloating Blockbuster did in their heyday. wonder if they anticipate a possible lawsuit from the deaf community?? Cancel no. Why would I do that. I don't stream. I was dvds and bds. whats the point of watching something that 1. doesn't play and 2. isn't in widescreen. and 3. crappy quality.

Actually, a 30% increase compared to a 30% hit to the customer base is a losing bet. Figuring 10 million subscribers at $10 a month the numbers work out to:

Before: 1,000,000 x 10.00 = 10,000,000.00

After: 700,000 x 13.00 = 9,100,000

Brian Miller said,
I think everyone has a problem with it.

Not everybody uses NetFlix for DVD's, so that puts it firmly in the "some people" category.

One of the biggest problems I see is that it depends on the users hardware. If your DVD player or your media box/player does not have these other services to make streaming to your TV easy like Netflix then the users will just stick with Netflix anyway.

Netflix started out cheap and is not integrated on almost every device you can think of. Now that they have lots of users, lots of supporters, etc they are raising the prices.

They really should allow you to rent only a few streaming/dvd movies for a small individual price. I watch a little of both but not enough to warrant the price hike. I now will decide to go with discs or streaming or quit both and find another setup.

Cable companies suck too. They should allow you to buy channels or programs you watch.

The streaming selection is pretty crappy. I never use it anyway, but I DO like having it as an option. I'm going to trip it from my account, now, and just retain 3-at-a-time.

I just buy the physical counterpart for what I want to watch, no one can control when or where or how many times I can watch it.

seebaran said,
Well looks like Blockbuster will live to see another day if they play their cards right after Netflix's folly.

I'm actually looking at Blockbuster now. Their prices for DVD only are a bit higher than Netflix, but they include BluRay for free which offsets most of it. They also include games. So it's basically Netflix + Gamefly in one. I'd be tempted to do Netflix streaming only but they don't have enough selection on there, especially of TV shows, and the quality is only so so. I won't watch movies on streaming because the experience just doesn't compare to a BluRay.

Not sure I understand the outcry over Netflix.

There are so many other way to rent movies now. (Youtube, Hulu, Amazon). And those are just the ones off the top of my head.

If you don't like what Netflix is doing...find another provider.

Although...what backlash that could happen from this...is that it could open the door for either one of the other companies to lower their prices and give Netflix "the needle" by saying...

"Rent from us..we won't gouge you like OTHER places will."

Or a new company to start with the same premise.

Either way...I think in the next few months..you are going to see movie rental/streaming companies coming out of the woodwork as an opportunity to take a shot at Netflix.

texasghost said,
Not sure I understand the outcry over Netflix.

There are so many other way to rent movies now. (Youtube, Hulu, Amazon). And those are just the ones off the top of my head.

If you don't like what Netflix is doing...find another provider.

Although...what backlash that could happen from this...is that it could open the door for either one of the other companies to lower their prices and give Netflix "the needle" by saying...

"Rent from us..we won't gouge you like OTHER places will."

Or a new company to start with the same premise.

Either way...I think in the next few months..you are going to see movie rental/streaming companies coming out of the woodwork as an opportunity to take a shot at Netflix.

Alas you do understand. The customers are now seeking alternatives for the very reasons you cited...

texasghost said,
Not sure I understand the outcry over Netflix.

There are so many other way to rent movies now. (Youtube, Hulu, Amazon). And those are just the ones off the top of my head.

If you don't like what Netflix is doing...find another provider.

Although...what backlash that could happen from this...is that it could open the door for either one of the other companies to lower their prices and give Netflix "the needle" by saying...

"Rent from us..we won't gouge you like OTHER places will."

Or a new company to start with the same premise.

Either way...I think in the next few months..you are going to see movie rental/streaming companies coming out of the woodwork as an opportunity to take a shot at Netflix.

In an ideal world perhaps. But most of the time, what happens is the other companies take the price increase as a queue to follow suite.
It's also worth considering the price increases from the stuidos to Netflix will also probably apply to the other companies offering a similar service.

DVD rentals are going the way of the dinosaur anyway. I'm sure netflix realizes this and most people will probably just stick with the streaming service. I'm sure at some point within a year or two netflix will again raise their prices for streaming.

Netflix most likely had talks with their bean counts and the bean counters
informed Netflix they might lose some members. When it's all said and done
most people complain and don't follow through.

So, I think people need to send Netflix a message. You should put your
account oh hold for a month or two and when the flow of money slows
down. Netflix might change their mind.

Bottom line, if your angry about the increase put your account on hold
for a month or two.

GenBlood said,
Netflix most likely had talks with their bean counts and the bean counters
informed Netflix they might lose some members. When it's all said and done
most people complain and don't follow through.

So, I think people need to send Netflix a message. You should put your
account oh hold for a month or two and when the flow of money slows
down. Netflix might change their mind.

Bottom line, if your angry about the increase put your account on hold
for a month or two.

Their flow of money is going to go up. Let's say the average account goes up by 30%. That means Netflix would have to lose about 30% of its subscribers before they seen any adverse impact.

Take into account that fewer viewers means cheaper licensing fees, their costs also go down.

The "bean counters" made the right decision.

DukeEsquire said,

Their flow of money is going to go up. Let's say the average account goes up by 30%. That means Netflix would have to lose about 30% of its subscribers before they seen any adverse impact.

Take into account that fewer viewers means cheaper licensing fees, their costs also go down.

The "bean counters" made the right decision.

The account only goes up assuming they keep DVD and streaming. I have seen plenty of people claiming they will be dropping DVDs, so they are going from paying $9.99 to paying $7.99 now. I don't think you can assume everyone who has DVD and streaming plans are going to keep both and pay $15.98 now.

family guy said,

The account only goes up assuming they keep DVD and streaming. I have seen plenty of people claiming they will be dropping DVDs, so they are going from paying $9.99 to paying $7.99 now. I don't think you can assume everyone who has DVD and streaming plans are going to keep both and pay $15.98 now.

If as you say, people cancel one or the other of the two packages, then the cost to Netflix still goes down.

family guy said,

The account only goes up assuming they keep DVD and streaming. I have seen plenty of people claiming they will be dropping DVDs, so they are going from paying $9.99 to paying $7.99 now. I don't think you can assume everyone who has DVD and streaming plans are going to keep both and pay $15.98 now.

That is exactly what Netflix wants. This way they can cancel their DVD service.

...and it looks like, at least at the moment, it's hard to get through to a Netflix employee in a timely manner.

...a Wall Street analyst with BTIG Research, called Netflix's customer service number 35 times in two hours on Wednesday.

No wonder it's hard to get through!

Also, the article says he called 35 times in two hours and experienced hold times between 9 and 15 minutes long. Unless he was using multiple phones, you can't do that in two hours.

iKenndac said,


No wonder it's hard to get through!

Also, the article says he called 35 times in two hours and experienced hold times between 9 and 15 minutes long. Unless he was using multiple phones, you can't do that in two hours.

Sure you can, when you're lying

iKenndac said,


No wonder it's hard to get through!

Also, the article says he called 35 times in two hours and experienced hold times between 9 and 15 minutes long. Unless he was using multiple phones, you can't do that in two hours.

He was probably using multiple phones.

DukeEsquire said,

He was probably using multiple phones.


Or multiple personalities and they were counting the time all the personalities were on the phone, so to speak LOL.

I can understand the split though. Studios are trying to get more money based on Netflix having more subscribers and they're going to charge Netflix. Netflix raises prices and splits off unlimited streaming into their own category which gives them a solid number of streaming subscribers to bring into the negotiation room.