LIVE STEAMING

Consumers are in an uproar and steaming mad over Netflix charging more for its online streams of movies plus one DVD by mail at a time. It will go up from $10 to $16. New subscribers are already being charged the new amount. Current subscribers will see the new charge this September.

For their streaming online only service will stay the same price $8 for old and new customers.

The New York Times reports:

For millions of customers, the shift in price might change the daily calculus of an entertainment diet made up of a myriad of choices: cable television packages, online streams, Redbox rentals and iTunes downloads. The price increase spurred complaints from thousands of Netflix customers on Facebook and other Web sites, some of whom said they may now rely less on physical DVDs and more on online options.

The new pricing is a big change from last November, when Netflix started selling its streaming service for $8 a month and offering one DVD at a time for an additional $2. At that time “we didn’t anticipate offering DVD-only plans,” Jessie Becker, vice president of marketing, wrote Tuesday in a blog post.

As Netflix knows well, the DVD business has been in decline for years as consumers have moved to the Web. But since November, Netflix has realized “there is still a very large continuing demand for DVDs both from our existing members as well as nonmembers,” Ms. Becker wrote. To keep the DVD service alive, the company evidently needs more than $2 a month.
Some Netflix streaming customers depend on the DVD-by-mail add-on because certain blockbuster movies are available much faster that way. If the customers move away from the DVD-by-mail service en masse, two potential beneficiaries are cable and satellite companies that rent movies on demand for a premium and vending machine operators like Redbox that charge lower prices for single DVD rentals.



Some Netflix streaming customers depend on the DVD-by-mail add-on because certain blockbuster movies are available much faster that way. If the customers move away from the DVD-by-mail service en masse, two potential beneficiaries are cable and satellite companies that rent movies on demand for a premium and vending machine operators like Redbox that charge lower prices for single DVD rentals.

Deadline reports that Netflix stock is dropping a little during midday Wall Street activity because of the subscription increase; consumers are upset and may totally bail on their accounts.

It's shocking to see how badly Netflix appears to have underestimated the general confusion and anger that has followed the announcement on Tuesday that it's raising by 60% the price of its combo DVD-by-mail rental and video-streaming service. More than 5,000 mostly furious customers responded to the Netflix blog post unveiling what BTIG analyst Richard Greenfield calls "perhaps the boldest single move in (Netflix) history." And Netflix shares are down about 3.6% in midday trading as Wall Street wonders whether the company raised prices enough to cover revenue it will lose from people who cancel the service. Lazard Capital Markets' Barton Crockett says that "few will pay the jarringly higher price" for the streaming and DVD combo plan and "most will move to (Netflix's) cheaper streaming-only" service. Netflix could lose some of its most profitable customers -- the ones who pay the monthly fee for DVD rentals but don't bother to order many discs.