Neflix Decides to Raise Prices?!

13 Jul

 Yesterday was a disappointing Tuesday. The popular online video rental company Netflix, released a statement where they discussed the upcoming membership price increase and the new structuring of their service. Unfortunately it was bound to happen. Many companies will introduce a product at a low price to lock in costumers. Then, once the company feels they have a large enough base, they’ll get greedy and raise their membership prices. This is the second time in less than a year that Netflix has raised the prices for a membership. The company will be creating separate plans for their streaming and mail services. By separating these services Netflix plans on charging separate membership fees for each, both priced at $7.99 with a combo package available for $15.99.

This may seem a bit drastic but I feel that these are the types of factors that lead people to embrace the piracy of films.  I believe that piracy is wrong and it only hurts the industry but when you look at it from the perspective of the average person, why spend the ever increasing amounts of money when you can get films online for free. The combination of Internet piracy and Netflix just about ran every video rental company to bankruptcy. The popular video rental companies Hollywood Video and Blockbuster closed thousands of stores and are focusing on Internet based rental services. In contrast, Netflix has expanded their service to include streaming to many devices and is constantly increasing their online catalog. Without the strong demand from outside competition, it’s safe to say Netflix has a hold on the video rental industry.

Out of my group of close friends, ALL of us currently have a Netflix membership. With Netflix being as popular as it is, it makes no sense for them to raise their prices. This price increase is simply a scheme for Netflix to gain even higher quarterly profits and the sad thing is that there is nothing we can do about it. I’ve read around the Internet and have seen people calling for the boycotting of Netflix. Although this is a good idea, it simply will not work. The price increase may be drastic but is not significant enough for people to take the time to organize a formal boycott. The fact of the matter is, people may complain but they will shell out the extra few dollars to keep a service that they love.

How do you feel about the Netflix price increases? Join the discussion and leave a comment below.

Follow Me on Twitter: @IndieTrent 

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One Response to “Neflix Decides to Raise Prices?!”

  1. rtm August 2, 2011 at 3:57 pm #

    Yeah, what a bummer!! It’s quite a steep increase but most people won’t have a choice but to shell out 15 bucks a month. I was thinking of just having the streaming-only plan but there are so many movies not available on streaming!! I don’t know if Netflix is solely to blame though, it could be that the studios are realizing the popularity of streaming and pressure Netflix (and other companies) to raise the prices. Either way, it’s us subscribers who lose on this 😦

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