Two days ago, subscribers of Netflix have gotten the email shown above, informing them that they now have to pay more. Just like that. No honoring existing contracts. No grandfathering down previous arrangements. No. You pay more now. That's how it is. Like it or not. That was pretty much the message. Of course they tried to suger-coat it in some nice ad speak language.
The public reaction has been tremendous. Just got to Netflix facebook page, and read some of the 62,000+ comments this price change has generated. That's 4% of their facebook fans. Many of them only 'liked' Netflix so they can voice their anger. Almost none of the comments were positive.
Customers feel betrayed, and taken advantage of. I myself was really angry, not because the increase was outrageous, but because of the way I was treated. Not like a valued customer, but like a cow that Netflix think they can milk any way they want.
Netflix simply has gotten arrogant. Or their Brand Management team is just very bad. Or they just don't care. Who knows. At the end of the day, this behavior show that they seem to have lost their edge, and have forgotten what made them successful in the first place.
The rise of Netflix, and subsequently the fall of Blockbuster has taught us one important lesson: a simple, yet significant change in the service you offer can win you millions of customers (by stealing them away from a big company that has gotten arrogant and slow).
Netflix and Blockbuster basically offered the same: movie entertainment. Yet while BB was relying on the old Store/DVD model, Netflix introduced DVDs by mail. Then they added streaming. BB never caught on, and when they tried to, it was too late to catch up.
So now Netflix is the big, arrogant player, and if there is any smart competitor out there, then listen: NOW is the time to win over hundreds of thousands of customers from Netflix. NOW they are open for alternatives. NOW they email, exchange information, listen to you. NOW. A week ago they didn't. In a week or two they might not. NOW is the time.
You bet that the majority of Netflix customers is angry. And if it's true that under normal circumstances only 1% of facebook fans are active commenters, then the 4% here show that this is an issue that Netflix has to take absolutely seriously. Or they are gonna take a major hit.
I canceled the streaming option. The movies were B and C movies only anyway. It was a 'nice to have', but not necessary. I kept the DVD by mail option though. That's where the good movies are. That's $8 less in their pocket a month. Take just 50,000 subscribers doing the same, and Netflix has lost $400K a month, or roughly $5 Million a year. I bet you though it is more than that. This is absolutely serious. Not sure Netflix understands.
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