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Netflix Tanks at the Worst Time

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How's this for bad timing?

Last week, Netflix customers grabbed their torches and pitchforks after the online rental house announced it would be raising subscription fees. No longer would unlimited video streaming and unlimited DVD rentals be included in one package for a mere $9.99 per month. Instead, the offers would be split into two, each for $7.99 a month, starting September 1.

And as customers contemplated which option to choose -- or cancel their membership altogether and make their acquaintance with a local Redbox kiosk -- Netflix may have helped irate customers make their decision Sunday night.

Right around when Netflix On Demand crashed.

Yes, as families settled in to watch back episodes of Pawn Stars, Netflix's streaming service went down just before primetime on the east coast. Biding its time, the company officially acknowledged the issue via Twitter a little after midnight: "For those of you having difficulty streaming tonight, our apologies - we're aware of the issue and working to fix it ASAP."

And just after two in the morning, the company's customer service account announced the problem had been fixed. "The streaming issues reported earlier today have been fixed. Again, our apologies - and thank you for your patience."

Not a problem, Netflix. I'm sure Hulu appreciated the outage.

But as CNet's Lance Whitney points out, this wouldn't be the first Netflix outage in recent memory -- the service went down for two hours in March and had another blackout less than a month ago.

While the price hike might all be a ploy to hasten the extinction of physical media, the alternative won't look as appealing if Netflix's streaming service keeps tanking.

(See also: Best Reactions to Netflix's Price Hike and Is Netflix's Streaming Data Seriously Flawed?)

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POSITION:  No positions in stocks mentioned.