Netflix Faces 'Unexpected' Loss of Subscribers Due to Monthly Price Increase

[steve-p]

I'm not keen on the direction Netflix is headed, with ever increasing budgets for their own original content at the expense of a seemingly shrinking catalogue of other bought in quality TV shows and movies. That's great, if you're mostly interested in Netflix original productions, but for the most part, I'm really not. Perhaps falling subscriber numbers shows that Netflix have misjudged why most people signed up in the first place. I'm not cancelling yet, but if the current trends continue, it won't be good value for me anymore as I watch less and less.

 

[attila]

they'll all come back. What else are you going to get for $9.99 a month that even comes close to Netflix?

I'm in the UK. The amount of TV shows and movies is so poor I didn't find it worth paying $10, as I'd rather just rent from iTunes as it at least has the movies I want to watch.
[doublepost=1469012153][/doublepost]

Because way too many people buy based on cost, not value.

It's the value which is the problem! The content is piss poor.

 

[unplugme71]

'Unexpected', really?

When you increase the price without adding more value, what did you think was going to happen?
Also, the tiered pricing for quality is a turn off for a lot of people.

So you stopped buying gas when the prices went up because it provided no additional value?
[doublepost=1469015647][/doublepost]

Very good point. It only caught my attention when the price changed. How much doesn't matter. Any subscription model relies on people signing up and forget about it.

The bigger problem is that Netflix has continued to change their pricing/offerings. Remember a few years back when they split streaming from mailing. Then they lost a lot of Tv content for original shows. I quit Netflix after all that. I lost a LOT of value. Hulu so far has been more than ideal and Netflix should look at their model.

 

[erinsarah]

Is it me, or is Netflix becoming to movies what MTV became to videos? Meaning, they simply stopped showing them? Ok granted the collection of original programming and and TV shows is good, but it's getting harder and harder to find any relatively current (or modern classic) movies via Netflix. With so many alternative sources out there, the extra $2 was simply an opportunity to look around at other options.

 

[0007776]

So you stopped buying gas when the prices went up because it provided no additional value?

Most people tried to cut back by not driving as much. I think netflix still has reasonable prices, but I wouldn't pay much more.

 

[4jasontv]

Lots of discussion about all kinds of things and yet nothing about what I was actually talking about in my original reply to someone else's post. Even in relation to the example I made the response was about another aspect of it which wasn't what I was taking about. (Not to mention that no promises were broken in relation to this, it's as it ways described.)

Really? You still don't see it? I wasn't interested in your original point, but rather a single fallacy that you had made. The price change has just occurred because now is the time the price change was felt.

And two things on promises. First, it doesn't matter if if they hadn't broken a promise here as they have done it in the past and that is good enough to assume they will again. Second, as I mentioned, their entire business model is to offer new content at a fix price. They said we could get new content every month for one flat price. If they stop providing new content or raise the price then they broke a promise. Please don't come back with some absurd "show me where they promised it" comment. It's the basis of their advertising and their business model. Sure, legally they can do it, but this has nothing to do with laws. It has to do with the fact that they don't care about their customers, and demonstrate time and again that they wont honor their commitments. I compare this to the level of service they used to provide. They used to credit us whenever their service went down, even if we didn't complain. We used to get $0.80 credits because the service was down for 12 minutes at 4 AM. Most of us were never effected by their outages, but we respected them, and that token credit made us vocal promoters of their business. There is no more respect because they no longer care about their product. They only care about their bottom line.

 

[tomtendo]

Not sure why this is a big deal. Really 9.99 or whatever a month is a issue? They have a huge library and great original shows. And its still a lot cheaper than other outlets minus hulu, which I think sucks. I use Netflix every day.

 

[tentales]

"Unexpected". Suuuuure. I unexpectedly cancelled, coz:
1) $7.99/month is low enough to keep it "ON" even during those months (summer typically) of low or no watching.
but now, I'll cut out half a year and still enjoy a good 6 months when I'm really binge watching. Less $$ for NF.
2) VPN blocking US access makes it less interesting for Canadian (and others) users.
3) Netflix was once the cord cutter's nirvana, now it's joining the cable company model.
4) In 5 years, prices will be $19.99/month for standard and $29.99 for 4K. Cable tv pricing essentially.
5) Hasting is a greedy ........ (insert fav. insult)
6) He's done it before in 2011 with hiking prices and splitting off DVD mailing
7) There are many alternatives these days, some much cheaper but require a bit more effort.
[doublepost=1469018277][/doublepost]

Not sure why this is a big deal. Really 9.99 or whatever a month is a issue? They have a huge library and great original shows. And its still a lot cheaper than other outlets minus hulu, which I think sucks. I use Netflix every day.

Some people have lives outside the DAILY screen routine.
Good 4 u. If you use it daily, I sometimes go a week without watching TV or a month or 2 without watching Netflix.
[doublepost=1469018601][/doublepost]

So you stopped buying gas when the prices went up because it provided no additional value?
[doublepost=1469015647][/doublepost]

Gas for transportation outside of vacations is not discretionary spending for most people. Entertainment is and the choices are greater than ever.

 

[TurboPGT!]

But that kind of thing isn't something that just started happening in the last month or two or so, it's been around for some time. While the drop mentioned in relation to this is quite coincidental (based on the information that has been provided) with the price change and the reminders about it spreading through the social and mainstream media in the last few months (as mentioned in the article).

Fair enough, that is a rather large drop in a short span of time. I just have a hard time believing that a $2 increase, of all things, would be the reason. Perhaps it is an amalgamation of factors...perhaps many users do feel like the value waxes and wanes too much as I described, and any price increase of any kind is a tipping point.

 

[Little Endian]

I cancelled my Netflix subscription after being a customer for nearly a decade. If I feel the urge I will re subscribe at the $9.99 price point through the iTunes Store where I have a massive stockpile of iTunes credits purchased at 80% on the dollar or less. I will effectively get Netflix for the same price as before and the only clear winner will be Apple.

 

[jimbobb24]

It doesn't matter what they were told. If they said the price was changing from $8 to $20 a month, but then decided to let them keep it at $10, they aren't saving $10. They are still being charged $2 more.

Netflix's word means nothing, good or bad, because they have broken their promises so many times. Until they actually charged the customers credit card more the price hadn't changed. Even if they said it had. It doesn't matter what they said, or what they called it. All that matters is the price the customer ultimately paid.



The reason this is bad example is because the only thing that is relevant is how wet they are. To the person inside they just started getting wet. With Netflix all that matters is how much the customer paid. The person inside got wet after other people, doesn't change when that indoor person got wet. It doesn't matter what everyone else is paying. What matters is what the grandfathered customer is paying.



It is a current price increase. Saying prices went up but not increasing the prices doesn't make the price higher. The service is still only worth what the customer is willing to pay. The proof in this is that customers leave if the price isn't worth it. Which they did. If the price had always been higher then they wouldn't have left due to cost.
[doublepost=1468984917][/doublepost]

The issue is that not everyone watches Daredevil. So if you love the show, and I don't, you are still dependent on me providing some revenue to keep Daredevil being made. Even if I don't watch it. Likewise there may be a show I like on Netflix I like and part of your subscription pays for that show. What keeps the content so fresh and of such high quality is that the user base is large enough that our cumulative fees pay for most of our favorites. When some users are treated poorly, such as grandfathered users have a price increase, all of our favorite shows are at risk. If enough customers leave the service than less shows can be supported. If my show is then cut and I decide to leave as a result then you have even less revenue for Daredevil. You may find that even though you are willing to pay more for the content you like the loss of customers who paid less than you has more influence over all.

That's the issue. The longer a customer is a member or subscriber the less likely they are to leave. That's why grandfathered customers are so important. And why $2 more a month is such a big deal. The loss of $8 hurts us more than the gain of $2 helps.

I just want to clarify you are crying about 2$ a month or $24 a year. The price of going to Starbucks 4 times, out of lunch twice, out to dinner once, going to a movie theater one or twice, buying 1 or 2 DVDs. This is great psychological evidence of how altering expectations can mess with people. It's a great value and if a few grandfathers people quit because they cannot wrap their heads around a $2 change than new customers will make up for it who have not had to readjust their set expectations. I was grandfathered in, but putting $2 in perspective helps me see that the change in such a tiny amount does not impact me at all. And is so small it will not impact people below the poverty line.

 

[2010mini]

Really? You still don't see it? I wasn't interested in your original point, but rather a single fallacy that you had made. The price change has just occurred because now is the time the price change was felt.

And two things on promises. First, it doesn't matter if if they hadn't broken a promise here as they have done it in the past and that is good enough to assume they will again. Second, as I mentioned, their entire business model is to offer new content at a fix price. They said we could get new content every month for one flat price. If they stop providing new content or raise the price then they broke a promise. Please don't come back with some absurd "show me where they promised it" comment. It's the basis of their advertising and their business model. Sure, legally they can do it, but this has nothing to do with laws. It has to do with the fact that they don't care about their customers, and demonstrate time and again that they wont honor their commitments. I compare this to the level of service they used to provide. They used to credit us whenever their service went down, even if we didn't complain. We used to get $0.80 credits because the service was down for 12 minutes at 4 AM. Most of us were never effected by their outages, but we respected them, and that token credit made us vocal promoters of their business. There is no more respect because they no longer care about their product. They only care about their bottom line.

That is totally disingenuous. Netflix's operational costs have went up since their inception. Content owners have purposely held back content. Netflix has made strides to combat this with original content.. Which is very expensive.... But should not be able to operate at a profit?

Do you think it is easy to negotiate content rights with Hollywood? And last mile bandwidth contexts with ISPs?

If Netflix did not care about customers, they would not have signed agreements with ISPs (major $$$$) so the quality streams would not affect their users.

Look at the entire picture instead of armchair quarterbacking

 

[C DM]

Really? You still don't see it? I wasn't interested in your original point, but rather a single fallacy that you had made. The price change has just occurred because now is the time the price change was felt.

And two things on promises. First, it doesn't matter if if they hadn't broken a promise here as they have done it in the past and that is good enough to assume they will again. Second, as I mentioned, their entire business model is to offer new content at a fix price. They said we could get new content every month for one flat price. If they stop providing new content or raise the price then they broke a promise. Please don't come back with some absurd "show me where they promised it" comment. It's the basis of their advertising and their business model. Sure, legally they can do it, but this has nothing to do with laws. It has to do with the fact that they don't care about their customers, and demonstrate time and again that they wont honor their commitments. I compare this to the level of service they used to provide. They used to credit us whenever their service went down, even if we didn't complain. We used to get $0.80 credits because the service was down for 12 minutes at 4 AM. Most of us were never effected by their outages, but we respected them, and that token credit made us vocal promoters of their business. There is no more respect because they no longer care about their product. They only care about their bottom line.

The fallacy isn't in what I mentioned, but in what you seem to try to imply. The price change didn't just occur because it was just felt, it occurred some time ago, it was simply only now just felt by some users. Just like the rain example that I brought up, where it would be incorrect to say that the rain just started simply based on when someone started feeling it when the rain has been going on for a while (and someone was simply inside and didn't feel it until later on when they came out oitside). It's that simple. Just as the promise in relation to the pricing where nothing about it was broken. Anything else is beyond the scope of that--it's perfectly fine that you have something to say about those things that are beyond it, it's simply just not related to what I originally commented on and have been talking about.
[doublepost=1469023239][/doublepost]

Fair enough, that is a rather large drop in a short span of time. I just have a hard time believing that a $2 increase, of all things, would be the reason. Perhaps it is an amalgamation of factors...perhaps many users do feel like the value waxes and wanes too much as I described, and any price increase of any kind is a tipping point.

as you see in quite a few replies even here simply having the subscription brought up to the top of mind for various people is enough to remind them that they are paying for it and might not actually be using it as much as they thought, which can make them re-evaluate it and cancel it, even without any pricing changes (while the idea of paying more, no matter how small, adds that extra emotional response and can provide an extra push for it all).

 

[4jasontv]

I just want to clarify you are crying about 2$ a month or $24 a year. The price of going to Starbucks 4 times, out of lunch twice, out to dinner once, going to a movie theater one or twice, buying 1 or 2 DVDs. This is great psychological evidence of how altering expectations can mess with people. It's a great value and if a few grandfathers people quit because they cannot wrap their heads around a $2 change than new customers will make up for it who have not had to readjust their set expectations. I was grandfathered in, but putting $2 in perspective helps me see that the change in such a tiny amount does not impact me at all. And is so small it will not impact people below the poverty line.

So you missed my point.
[doublepost=1469025190][/doublepost]

That is totally disingenuous. Netflix's operational costs have went up since their inception. Content owners have purposely held back content. Netflix has made strides to combat this with original content.. Which is very expensive.... But should not be able to operate at a profit?

Do you think it is easy to negotiate content rights with Hollywood? And last mile bandwidth contexts with ISPs?

If Netflix did not care about customers, they would not have signed agreements with ISPs (major $$$$) so the quality streams would not affect their users.

Look at the entire picture instead of armchair quarterbacking

I actually said they had every right to raise prices. My issue was that they isolated a customer base, told them they were special, and then retracted that sentiment. Their ability to communicate with customers effectively is the issue.

 

[2010mini]

So you missed my point.
[doublepost=1469025190][/doublepost]

I actually said they had every right to raise prices. My issue was that they isolated a customer base, told them they were special, and then retracted that sentiment. Their ability to communicate with customers effectively is the issue.

Isolated? I'm part of their customer base and I never felt isolated. I have in no way felt slighted by Netflix. Their bold path to original content. And how they decided to present that content was a breath of fresh air.

I am actually surprised it took this long to increase the price as I have some idea how difficult it is to purchase rights for content. It's the reason you don't have access via Netflix for the content you want.

 

[mi7chy]

Nothing new since this happened in the past. Good opportunity to invest in NFLX stock since it'll rebound.

 

[phairphan]

Who outside Netflix didn't see this coming?

The competition is growing and haven't been raising their rates each year as Netflix has.

While Netflix has put a huge push behind original shows, they've ignored the other side, the people that want shows and movies found on network TV which they'd originally gotten the service to watch. This area has been pushed away while Netflix seems to focus only on the few original shows they're trying to shove down everyone's throats.

I don't have a problem with the price increase, but this is so true. Most of the Netflix original programming (NOP) is awful. One need only scroll through their "recommended" shows (curiously littered with NOP) to see how many are rated 1 or 1.x stars. It looks like they're throwing a lot of crap at the wall to see what sticks.

 

[C DM]

I don't have a problem with the price increase, but this is so true. Most of the Netflix original programming (NOP) is awful. One need only scroll through their "recommended" shows (curiously littered with NOP) to see how many are rated 1 or 1.x stars. It looks like they're throwing a lot of crap at the wall to see what sticks.

And yet Netflix keeps on coming up more and more when it comes to various awards.

Like Emmys where they got even more nominations this year than before, and are actually in the top 3 amongst all networks (as in established actual TV networks): http://mashable.com/2016/07/14/emmy-nominations-netflix-amazon-hulu-streaming-services/

Or the Golden Globes where they were even at the top of the TV category when it came to nominations: http://www.wired.com/2015/12/golden-globes-amazon-netflix/

 

[phairphan]

And yet Netflix keeps on getting more and more award notations, like Emmys where they got even more this year and are actually in the top 3 amongst all networks (as in established actual TV networks): http://mashable.com/2016/07/14/emmy-nominations-netflix-amazon-hulu-streaming-services/

I'm not saying there isn't some good or great original programming. While most of the shows listed aren't of interest to me, I can appreciate their quality and I recognize that many people love and find value in them. However, Netflix produces a lot more original content than the nine shows listed for Emmy nomination nods. And it's content that we're paying for with the price increase, per Netflix's communication. I can't shake the feeling that their non-original content catalog has staled for this reason.

 

[2010mini]

I'm not saying there isn't some good or great original programming. While most of the shows listed aren't of interest to me, I can appreciate their quality and I recognize that many people love and find value in them. However, Netflix produces a lot more original content than the nine shows listed for Emmy nomination nods. And it's content that we're paying for with the price increase, per Netflix's communication. I can't shake the feeling that their non-original content catalog has staled for this reason.

I for one want Netflix to keep increasing quality original content. Netflix is the major reason traditional networks are now paying attention and adding to quality shows like Walking Dead. The have helped made the tv watching landscape better. Their money is better spent on original content than over paying the studios and networks for old shows.

 

[4jasontv]

Isolated? I'm part of their customer base and I never felt isolated. I have in no way felt slighted by Netflix. Their bold path to original content. And how they decided to present that content was a breath of fresh air.

I am actually surprised it took this long to increase the price as I have some idea how difficult it is to purchase rights for content. It's the reason you don't have access via Netflix for the content you want.

If you didn't receive the lower price, than I'm not talking about you.

Isolated isn't a "bad" thing. You can isolate people and treat them better.

 

[ILikeAllOS]

I think part of the problem is just how stagnant Netflix has become. Let me explain.

Years ago, around 2005-2006 I signed up for Netflix. This is when there was no streaming, just DVD rentals.
What attracted me to the service over rental places like Blockbusters was the small monthly fee of $7.99, unlimited rentals per month, no late fees and finally the LARGE selection of movies they had. Literally any movie you wanted, they had it!

Well fast forward a decade later to today and Netflix has spun-off their rental division into a separate "dvd.com" company, there's no longer late fees or rental limitations that you have to worry about nor is it a selling point for Netflix anymore.
So how are the other 2 selling points doing; the low price and selection?
Well there's the problem.

While Netflix used to be known for having every movie you can think of that has all changed. Now at Netflix you can barely find anything to watch!
You heard Birdman and The Revenant were great movies so you want to check them out since you initially weren't interested when they were in theaters?
You want to watch CA:CW but you wanna catch up on the MCU first by watching the 2 films you missed, GotG and Ant-Man?
You missed Disney films like The Jungle Book and Zootopia when they were in theater?
Or maybe you heard how bad BvS was so you would like to see it for yourself?
Well no problem! Every one of them are available on dvd.com....
...but not on Netflix!

The selection is so small now that Netflix posted a video responding to everyone's complaints by letting them know that new movies are finally being added. In fact the beginning of the video is a montage of complaints they've received on Twitter.

So how do you think people feel when they're paying for 2 accounts (Netflix and dvd.com), they're waiting for Netflix to be on parity with dvd.com so they can also stream those movies on mobile devices or devices without dvd drives (like Macs), waiting so they can finally cancel the dvd plan and then instead they see Netflix is just jacking up the prices?
Well there you go, hence this article.

 

[tonyr6]

I agree. The last few weeks I watched a most a hour of Netflix and not even every night. There lack of movies and less TV shows have driving me to other streaming services which I am watching much more because anything good on Netflix either expired before I could finish it and what little is left I watched most of it. Even looking for a movie last week I had ice cream and I forgot I was eating it. By the time I gave up my ice cream was already half melted. Funny but true story.

Also having no interest in most original programing and the price increase is making me rethink my subscription soon.

Here are some more links on why I am not alone.
http://exstreamist.com/people-arent...-cancelling-because-the-library-is-shrinking/

 

[Gruntersdad12]

It's not silly because Original programming is a HUGE part of what has allowed them to create high demand and keep their price as low as they have. In other words it's one of the main reasons for their success.

Prime is good if you really like ALL the things they offer but if we're comparing just their video service selection in terms of quantity and and general demand let's not act like they have anything close to Netflix.

All the services in Prime (Music, Movies, Books, etc) are all second rate when compared to services that focus solely on each.

It's the fact that they're all bundled together that makes it somewhat of deal for those it appeals to but it really is almost a "jack of all trades, ace of none" type of deal.

It's only 2.00? It's almost 23 percent. How many other services will you keep if they raise their rate 25 percent. Even if I only use the movies on Prime it is still cheaper, 8.25 per month. I find more of what I want on Prime, and if I have to order something, it is shipped for free. That Original program The Ranch was nothing but garbage. I don't want my increase spent on rescuing the lives of has been actors playing in bad movies.

 

[Signup]

I feel like this probably happened because a bunch of people who were paying $8/month to Netflix and not really using it got the notice and were like "oh yeah, I pay for this and don't use it, and now it's going to cost more. Might as well close the account."

But overall, I'm all in favor of streaming services like Netflix and Hulu (as well as a la carte options like HBO Now), because it's absolutely absurd to pay $220/month to Comcast for their "triple play" plan (which, until recently, my parents were shelling out on a monthly basis). Anything that gives people a better alternative and means that Comcast has to start competing is a good thing in my book.

Any other service but Hulu… Hulu should be punished for trying to push that horrible service onto the public. I pay and I still get commercials… how greedy can one be?
[doublepost=1470073208][/doublepost]

I was completely with you until this point. Not tipping Uber drivers is not necessarily about being cheap. The reason I use Uber is because I don't carry cash and I don't like all of the hassle surrounding paying in a traditional taxi. In addition, tipping ads a HUGE amount of hassle when I'm on a business trip as I have to tally that up for reimbursement.

I love that I can just jump out of the car and carry on my way with Uber.

If Uber were to add a way to tip in the app I would absolutely do it. ESPECIALLY if they allow you to do it post-ride... as in, after I get out of the car (like when I'm rating the driver). I view tipping as a way to reward great service and I would do the same with Uber.

I've heard that Lyft does it this way... but I've never tried them.

Anyway, the world is not as black and white as you want to paint it. People have many reasons for how they spend their money and not all of us are out to "ride on the backs of others"... what a ****** way to view the world!

Ok but there are alternatives for those who truly want to be fare and not abuse the system and the drivers. If uber automatically took a tip from riders without giving them an option, riders will surely seek out Lyft or another ride service that presents them with an option to tip or not.

It's the same crowd that wants Netflix to keep providing great service but don't want to pay for the true worth of the service and convenience.

Netflix is a great service, I love the flexibly to turn it on when I want to for a few months, then off it goes when I don't need it. I'm not entitled to have all year long especially if I don't want to pay for it.