Anger Over Netflix Price Hike

A day after it was reported that Netflix plans to introduce a $7.99-a-month plan that will allow subscribers to rent an unlimited number of DVDs -- but not access streaming videos -- the company said it was ending its $9.99-a-month plan allowing them to do both. Subscribers who now wish to rent DVDs as well as stream movies will have to sign up for two services -- DVD-only and streaming-only -- each costing $7.99 monthly. In effect, those who were using both formats in the past for $9.99 will be getting a 60-percent price hike. Immediately after the change was announced, the Netflix website was flooded with complaints. Some analysts noted that currently many subscribers primarily use the streaming service but augment that with one or two newer DVD releases each month. The new pricing structure, they suggested, will likely result in their subscribing to the streaming service for two dollars less and spending their $2.00 savings at kiosks for newer movies. The Wall Street Journal quoted Dan Rayburn, an analyst at research firm Frost & Sullivan as saying that the Netflix move "makes no sense." He predicts that few people will opt for both plans, leaving Netflix with millions of subscribers who will henceforth be paying $2.00 less per month than they do now.

13/07/2011


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