Netflix Fee Increase: Humanity’s Most Trying Moment


Each week, Death by Science sends out an all-points bulletin for the latest science and technology news, tracks it down and beats a confession out of it. This week, we take a look at Netflix’s monthly fee increase and the fervor surrounding it. The Internet boldly takes a stand and says, “Six buck a month to stream Swamp People? Over our dead bodies!”

Tuesday, July 12. Remember that date. It will live more than in infamy, for the pain caused on that summer day will never heal; just scar. July 12, 2011 was the day Netflix emailed their customers to inform them of a monthly fee increase for their combination streaming and DVD-through-mail service.

Many left the email unread, thinking Netflix was again asking them, “How was the picture quality of Monk, Season 3?” The email, which will be taught to future school children as the turning point of 21st century American history, stated the following:

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

When we received that in our inbox we had to triple-check to make sure the return address wasn’t the Taliban. Rest assured, it was Netflix, and their fee increase has sent the entire Internet into a tantrum.

“Dear Netflix” became a trending topic on Twitter after the news and BuzzFeed compiled a list of users’ most pointed reactions. They chart the solemn and measured mood of the nation after this unjust act:

This kind of introspection is common in times of great tragedy, and many could not help but ask, “Why?”

“Why, oh why, do I now have to pay six dollars a month extra to stream Blade 2 on my computer while I wait for the DVD-only Blade: Trinity to arrive in the mail?”

Netflix justified their actions in a post on their blog:

We have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs.

Others argue that they are preparing to accrue extra revenue in order to afford the rights to stream movies. As it stands, studios hate Netflix. Greg Sandoval of CNET says Hollywood executives feel the online service is too powerful and minimizes their ability to profit from their own product:

  • Netflix siphons off sales from other important areas, such as the airlines. Since more airlines are offering in-flight Internet access, a Netflix account means that movies may be less valuable to the carriers.
  • There is evidence that Netflix’s streaming service discourages users from purchasing newly released DVDs. The studios see indications that for even hit films, which likely won’t appear on Netflix’s streaming service for years, some Netflix subscribers are satisfied to wait until they do.
  • Films offered on Netflix lose value rapidly. Some cable and traditional broadcasters won’t go near a title once Netflix begins streaming it. Netflix takes the scarcity out of the equation, one film industry insider said. People can watch any of the service’s commercial-free films and shows anytime they want.

Studios are already fighting back by denying Netflix the right to feature their most desirable films. This is why, when you want to stream an Eddie Murphy movie, you have to watch The Golden Child instead of 48 Hrs.

We called Netfilx customer service to gauge the level of uproar from the angered masses. Alyssa, our service representative, said that, “honestly, 75% of calls” were related to the fee increase.

Were the incensed customers comparing the rental outfit to Casey Anthony or likening it to brutal rapists as they were on Twitter?

“I’d say about 60% of calls were people who were happy about the service change. They liked that they could pay less to just receive DVDs in the mail because they never streamed movies in the first place.”

This seems odd because it is estimated that well over 60% of Netflix customers stream content. What this probably explains is that the people who call toll-free customer support lines are that rare breed of shut-in who don’t have the Internet. They are also the kind of people who call the “Comments? Questions?” number on the back of peanut butter packaging to ask when it goes bad.

In a poll conducted by The Street, 54.1% of over 5,000 respondents said they plan on cancelling their Netflix subscription altogether. So where are all these refugees going to go? Many say they plan on using Red Box, the physical monolith at drug stores and groceries that offers new releases on DVD. Others are content to use Hulu and other free streaming services.

Blockbuster is offering disgruntled Netflix customers a free, month-long trial of their own service in an attempt to lure people who are fascinated by the prospect of seeing what a company is like right before it goes bankrupt and vanishes completely.

The Netflix debacle has demonstrated what an online protest looks like. Hyperbolic, reactionary and often vulgar, it looks just like the Internet.

If any Netflix protesters feel like watching a good flick to inspire them to fight the good fight, we recommend Norma Rae, the true story of a mill worker who unites her coworkers to earn fair wages and better conditions.

Unfortunately, it is not available to stream on Netflix.