Massive Exodus From Netflix Over Fee Increase

from the surprise dept

When Netflix first hit its customer base with the rather massive fee increase, we noted just how loud and passionate the response was. A week or so later, Netflix boss Reed Hastings insisted that they were actually surprised that the response wasn't worse, stating:

"Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers."

Perhaps he should have waited until all of his customers got over the shell shock. The company is now admitting that a lot more people than they expected have canceled their accounts. Somewhere in the range of 600,000 customers bailed on Netflix over this, making it just the second time that Netflix has had a net loss in subscribers month-to-month.

While Hastings also tried to spin the price increase into a story about how Netflix was accelerating subscribers' shift to digital, that story is falling flat with partners like Starz bailing out.

It's beginning to look like our original statement about the price increase was the most accurate. It was driven by the ridiculously high fees that Hollywood now wants, because it can't stand the thought that a service provider like Netflix actually should get any value from helping to drive the market forward. Instead, the content is 100% of the value, and they deserve any and all profits (and then some). It's a classic killing of the golden goose -- something that Hollywood always tries to do. At this rate, it might just "succeed" in that once again.

Filed Under: movie subscriptions, pricing
Companies: netflix