business newsNetflix Raises Prices: Keep Your Cash With 8 Alternative Options
Cash-strapped consumers are not thrilled about Netflix price increases coming on September 1. Here, a few alternatives for those vowing to cancel service.
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The Netflix Changes
Here are the basics of the Netflix changes. Instead of having DVD rentals and streaming movies priced together, each portion will be priced as a separate plan. For most users, this will increase the monthly bill by $6-10. Price changes will take effect September 1.
Customer Backlash
Understandably, cash-strapped consumers are not thrilled about price increases. The official blog post announcing Netflix's changes has generated more than 12,000 comments. Most appear to be current subscribers pledging to cancel their subscription.
More Than the Price
On the surface, $6 doesn't seem like an outrageous amount, but customers are hurt about more than the money. Many who've been with Netflix from the start feel their loyalty has been betrayed. Disgruntled loyalists would like prices to stay as they are for current subscribers with increased rates only for new subscribers.
Not Enough Bang for the Buck
Another customer gripe is that the product doesn't justify the higher price. Subscribers have complained the streaming movie selection is lacking. They contend new material is not added often enough and many times the streaming video quality is poor.
Switching to the Competition
The price increases by Netflix are encouraging many users to give the competition a try. Redbox is one of the most popular alternatives, with $1 rentals and locations in just about every neighborhood. Amazon Instant Video (AMZN) is another popular choice. Streaming new releases are typically $3.99 to rent for a 48-hour period.
Price Increase Reasoning
Even though Netflix subscribers are in an uproar, the company isn't entirely to blame. When Netflix started its streaming service, studios that own the movies didn't realize the potential for profits. With the surge in streaming media popularity, studios want to charge a premium for their content. One expert has predicted Netflix's content-licensing costs will increase from $180 million in 2010 to $1.98 billion in 2012.
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