Netflix’s announcement of a price hike earlier this week brought about all manner of trouble, with the blog post breaking the news receiving around 5000 complaints within a day, and social media burning up with customers upset and angry at the short notice of the change, and the change itself. But does any of this sound or fury mean anything?
Since the announcement, Netflix has seen its share price fall around 4%, which isn’t something that any company would be happy with. And yet, for all the outcry, will anyone actually quit Netflix over the change? It seems particularly unlikely, for a number of reasons. Firstly, there’s the fact that this kind of online complaint is almost never reflected in any kind of measurable action – Think of fans complaining that they’ll never watch a particular television show, or read a particular comic book again, only for the next round of ratings and/or sales figures to be released, and for there to be no discernible difference from before. It’s one thing to complain on social media (Isn’t that what it’s there for?), but to take actual action…? Yeah, that’s not so easy, and so much more disruptive.
There’s also the matter of… What is there to replace Netflix? There are other companies that do part of what Netflix does – Blockbuster, now owned by Dish Network, has smartly tried to position itself as the disc-only alternative in response to this current situation, offering sign-up deals for current Netflix customers – but no-one really has either the mix of disc and video-on-demand content, nor the breadth of choice that Netflix offers. You could, theoretically, sign up to multiple services to replace Netflix’s one, but that’s likely to end up being as expensive as the new Netflix, if not moreso, in the long run.
See, here’s the thing: Netflix’s new prices are a significant raise on what they previously had been… but that doesn’t necessarily make them unreasonable. The idea of unlimited streaming plus one, two or more discs at a time for around $20 a month is still, let’s face it, a remarkably good deal – and with costs rising for Netflix (VOD streaming has become increasingly more expensive for them, as studios and providers realize how important it’s becoming, and renegotiate contracts), it’s unsurprising that they have to pass some of that expense onto the customer… and also pretty fair, to be honest.
So, will anything come of the outcry surrounding these Netflix price hikes? Yeah, I think so – but it’s not going to be people canceling memberships or anything so dramatic. Instead, I can imagine people will scale down their memberships – Going to disc or streaming only, or cutting back from two discs at any time to one. Doing so will bring the cost down to what was being paid before, essentially, and allow both parties to operate on lower expectations but essentially still getting what they want. And isn’t that the best case scenario all ’round?
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