This was originally a guest post on WaxingUnlyrical 7/14/2011
If you’re a Netflix subscriber you’ve probably already received a notice indicating the pricing and plan changes. If you haven’t it can be summarized as a discount for streaming only customers and a huge price hike (up to 60%) for people who like to get DVD’s from them in addition to the streaming. Our family happens to enjoy both, and evidently we’re not alone.
Since the Emails started rolling out Netflix has been taking a beating of “Dear Netflix – “ tweets, comments (38,007 as of this writing) on their fan page and overall really bad sentiment across blogosphere and social media.
A Solution to the Problem
The best argument that I’ve seen for Netflix is that the studios are squeezing them for more money. As early as 2009 there was an indication that Studios were going to be squeezing more out of their DVD products. The only problem is that is a relatively weak argument, why is that you ask? There is absolutely no reason why Netflix couldn’t honor their current customers pricing and raise the prices for new subscribers. This would prevent the loyal subscribers from feeling like they are being gouged.
A Real Test
If Netflix were to honor their current pricing with subscribers and was unable to win new subscribers with the higher pricing model then they would know that the new pricing model would also not work for their current customers. They could achieve this without alienating their loyal customers. You know those people who helped put their local Blockbuster out of business by loyally ordering their DVD rentals from Netflix the last few years? Yep, those “valued customers”. A relatively strong brand has been tarnished and that is unfortunate but it is a self inflicted wound.
What would you do if you were Netflix?