In these times of high prices in movie tickets, rentals and cable service, Netflix has become a way out of these high costs for many people.
Netflix offers almost every movie or TV show either by mail or online streaming at home through a gaming device or computer. This convenience to allow people to stay home and save money has become something many Americans love and has made Netflix a mutli-billion dollar company.
Over the summer, Netflix made a move I think it already regrets. Netflix announced a 60 percent increase in prices for American customers, with little explanation for the move. When the price increase was announced, customers received an email informing them of what the increases were and how much the increase was, but little else was mentioned. It left many customers with the feeling that Netflix was greedy, only raising the prices to fill their pockets a little more.
After sending “the email heard round the world,” and receiving the brunt of many angry customers’ rants, co-founder and CEO of Netflix Reed Hastings sent out another email to apologize for the price increase. He also stated the reason for the increase. He said the company saw the increase as necessary to keep providing its customers with their services and to increase the amount of movies and TV shows available for streaming. For a lot of customers it was still too little too late.
Hastings also announced the creation of Qwikster, which was meant to take over the company’s mail-in movie service, while the online streaming would remain as Netflix. It was a move that further confused an already angry customer base. After another round of angry out lashes from customers, Hastings sent out another email a few weeks later, announcing the end of Qwikster, before it even started.
Throughout the tumultuous summer, Netflix lost over 800,000 customers in the U.S. and has seen its stock plummet in recent weeks. Much of the loss could have been stopped with more communication from the CEO to the customers. Hastings’ inability to get his company’s point for the price increases across left the customers feeling separated and taken advantage of by a greedy company and led them to end their subscriptions with Netflix.
I am a customer with Netflix and I plan on continuing to be. The truth is, Netflix offers a great variety of movies and TV shows and a lot of them I can watch on my computer and PlayStation 3, which is a great convenience for me. They offer all of this at a fair price.
I understand the need for a price increase. Netflix has pushed to get more on its video streaming and to do that, they need money to buy the rights to stream the movies and TV shows online. The problem is the way the company went about doing it. It should have been more up front about the moves.
Coming out with an initial email that said the company was increasing prices followed by detailed reasons of why the increase was necessary could have saved a lot of the flak the company received. It might also have kept a few of those 800,000 lost customers.
Through it all, Netflix is not hurting, don’t let them fool you. Their loss dropped them from over 24 million customers in the U.S. to around 23.5 million customers. Trust me, they are still doing just fine, but they should learn a lesson from this summer – always be upfront with the customers.