Monday, during a conference call, Netflix responded to the fact that current customers are upset about the up to 60% price increase in its services. During the second quarter, revenue rose 52% to almost $789 million, according to CNN. But by Tuesday, Netflix stock had fallen over 9%.
In early July, Netflix announced that DVD-only plans start at $7.99 per month, or the streaming-only plan. A monthly plan that combines both will cost about $16, which is approximately a 60% price increase.
Netflix offers DVDs-by-mail and Web-streaming service of movies, videos, etc. For existing customers, rates will change September 1, 2011, and for new customers the price changes were effective Tuesday.
Earlier this month, customers complained on a Facebook page with over 28,000 angry comments. Tens of thousands of customers left angry comments on Facebook, Netflix and Twitter in protest. On Twitter, customer used #DearNetflix to voice their complaints about the approximate 60% in price increases.
Netflix released this statement in response to the complaints:
“It is expected and unfortunate that our DVD subscribers who also use streaming don’t like our price change, which can be as much as a 60% increase.”
Monday, Netflix said that “some subscribers will cancel Netflix or downgrade their Netflix plans, [but] we expect most to stay with us.”
During the conference call, they also said that they anticipated the response and they actually anticipated more of a response.
The social media “noise level was actually less than we expected, given a 60% price increase for some subscribers,” said Reed Hastings, the CEO of Netflix. “We knew what we were getting into.”
Netflix price increases anger customers
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Sources: CNN and GMA
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