Like many Netflix subscribers I was unhappy with the new monthly price hike that will take soon take effect. This month Netflix announced they’ll be increasing their plan pricing. The trend of rising prices for streaming content is a growing one. Cell phone providers like Verizon, AT&T and T-Mobile are all planning to eliminate unlimited data plans in favor of tiered pricing. With experts predicting most cell phone users won’t be hit by the changes for a few years, Netflix is taking most of the heat.
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.
- Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month.
- Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.
- The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). For new members, these changes are effective immediately; for existing members, the new pricing will start for charges on or after September 1, 2011.
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. Many bloggers, who are long-time customers of Netflix, are upset with changes as well. (See Sara from Momma Findings post about Netflix’s price increase: here).
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 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 their streaming service, studios who 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.
Consumer savings expert, Andrea Woroch, offers a few alternatives to help you keep your cash if you don’t want to pay these increased costs.
Andrea Woroch is an established consumer savings expert passionate about helping individuals discover financial freedom. She understands that everyday costs quickly add up and life can get expensive. Her goal is to teach consumers how to live on less without radically changing their lifestyles, Andrea has appeared on The Today Show, ABC News NOW, NBC Nightly News, FOX, MSNBC, CW and been quoted in SmartMoney.com, Kiplinger Personal Finance and many others.
DVD Exchange With FriendsDo you have a shelf full of DVDs you just can’t bring yourself to watch again? Get a few friends or co-workers in on a movie exchange. Trade movies one for one and trade back when you’re all done watching.
Rent From the Library
With the demise of local video rental stores, finding releases from a few years back is growing increasingly difficult. Renting movies from the library can help you track down many titles not available from Redbox. Even better, the rentals are free!
- Find local libraries at http://www.publiclibraries.com/
Discount Gift Cards
Going to see a movie in the theatre isn’t exactly a steal, but there are some ways around high prices. Popular cinemas like AMC and Regal both have more than 100 discounted gift cards available at GiftCardGranny.com.
Matinee Movies
If you work a 9-5, matinee movies may be out of your reach, but they make for another way to beat high prices. Tickets cost much less and you don’t have to deal with the massive crowds you find in the evening.
Neighborhood Movie Night
Consider going in with a group of neighbors and investing in a backyard movie set-up. Hopefully, someone already has a projector they’re willing to share. All you need then is a screen. Inflatable, outdoor projection screens can easily be found online for less than $200. This tip might not save a ton of money, but it can help a whole group of people stop paying their money to Netflix.
Free Screenings
Plenty of filmmakers just want their movie to get seen. College campuses are great resources for finding free screenings. Many towns also offer free showings of classic films at parks throughout the summer. A local paper is a good way to find out if there are any offerings in your area.
Get Outside
The natural world was here before streaming Netflix and it will certainly be here long after. Take the money you’d spend on movies and invest it in a national parks pass. The cost is only $80 for one year and it gets you and anyone in the car with you into more than 2,000 sites across the country.
Dial Into Daily Movie Deals
Deal of the day sites like Groupon and LivingSocial occasionally offer discounted movie theater tickets for as little as $2 per person. That’s a pretty cheap movie night outing and well worth the price.
Great ways to save money…you forget there are other ways to get DVDs and movies.
I was so angry about the price increase because I don’t think its fair to the long-time subscribers. There are should have been a “grandfather clause”. I am thinking of switching over to Blockbuster. Thanks for sharing the tips.
Betrayed is a good word.
We’re switching to streaming only and have been researching alternatives such as Amazon…gracias! And, it is back to Red Box we go, I guess.
I like that one of the alternatives is to go outside and do something non-movie-ish. The neighborhood movie nights is also a super cool idea.
We never signed up for Netflix and now I’m glad I didn’t. I just didn’t like the commitment of paying per month since the amount of movies we watch varies – I don’t know if it would end up being worth it. We love to use Redbox – just wish there was more variety. I have trouble finding documentaries and foreign films which are my favorites, but most usually end up being available online, which is where I do a lot of my “TV” viewing.
I don’t use Netflix. Much less now that they are raising the prices. I do love the fact that movie theaters are trying to help families enjoy movies!
Great tips! Thanks!
I couldn’t agree with you more. We are very disappointed and are going to look for other video alternatives.
Wow! Really excellent post! You really hit the nail on the head. As a Netflix subscriber, I see this post as incredibly accurate and thorough…it really explains why customers are so upset. And lets not forget, their last price hike wasn’t that long ago! Thanks for sharing this!
I closed my account as soon as I received the email. I wouldn’t have been offended if they were improving or adding to their services to justify the increase but that’s not the case. It’s not worth it. The new movie selection isn’t that great compared to Dish or Cable.
I have netflix, but sadly never use them often. I need to cancel my account, thank you for sharing
I keep waiting for Netflix to make their way down to Mexico, but if they’re going to pull something like this, I’d rather they not come. 😛
Tried Netflix once and the movies mostly remained in the package as I am not a huge money buff.
With these new prices, I definitely won’t renew my membership. It isn’t worth it to me!
After reading this post… I just cancelled my account….that’s just wrong.
We’re thinking of switching to streaming only. But, the selection is more limited. Sigh…
These are some great alternatives, but I love movies and video games too. Blockbuster still holds my business with their arsenal of entertainment and it’s not bleeding my pocketbook now that they have lowered their prices. Plus as an employee of DISH Network I was one of the first to find that they are offering new subscribers 3 months free of Blockbuster. This includes in-store and mail-in services on DVD’s, Blu-ray’s, and video games with no late fees and no commitment after the trial. Here’s the details http://bit.ly/l2OWJ8
My friend Rozy having some serious issues with streaming Netflix on the PS3, if any user have proper solution, then comment here and give suggestions, last time in 2013 Netflix raised prices, but I am fan of them, so still now using their services – thanks.
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