Netflix Rate Hikes Now Fast and Furious

This week, Netflix announced rate increases that have enraged customers and thrilled investors. I am both. I’ve been complaining as loudly as anyone about the latest increase. It raises my current 2-disc+Blu-ray+streaming service by 20%, and it’s a substantially greater increase for some customers’ plans. This increase comes on the heels of another just this past January and numerous other rate adjustments before that. At the same time, I’m also a Netflix stockholder, and I can’t complain too much about the fact that my stock is now worth 17 times my initial investment. That’s not 17%—it’s increased 1700% in value over the past seven years.

So how much has your monthly Netflix plan price changed over the years? Quite a lot, actually. And what people may not remember is that years ago, Netflix was lowering prices to keep ahead of Blockbuster. It worked. And now we’re paying the price. Let’s look at a 3-disc plan over the past 10 years as an example.

*Service added at no additional cost

In this example, we’re including services introduced at no cost as part of the expected base service. When high-definition discs were introduced, Netflix included them as part of the base plan, then they charged a premium fee for the feature.  They’re doing the same thing now with streaming—charging separately for something that customers have received (and now expect) as part of their base Netflix experience.

Of course, if you want to be a stickler about it, the new rate for 3 DVDs at a time (without Blu-ray or streaming) would now be just $15.99. That’s actually lower than it’s ever been, but that’s to be expected—DVDs are gradually being succeeded by Blu-ray and streaming services.

So what does all this mean? Most consumers probably won’t do this level of research and analysis to calm their knee-jerk rage over these latest rate adjustments. The bottom line is that, depending on when you started with Netflix and which services you currently use, your rate could be going up…or down. Is hiking rates unapologetically like this a crappy thing to do to a loyal customer base? Yes. Do you have comparable options if you want to cancel or change your service? Maybe. Will I be canceling my Netflix subscription? No. I will, however, be downgrading to one disc at a time to counteract this latest increase. And I can’t fight this nagging feeling that’s exactly what Netflix wants me to do.