I’ve been thrilled with my Netflix subscription. Movies are mailed to my home. I get to decide which ones I want and in which order, and Netflix provides a prepaid envelope to mail them back. Best yet, there are NO late charges - EVER. When my movies find their way back to Netflix, they send me the next ones from my prioritized que. It’s genius as a business concept and personally, I’m grateful to have a couple must-see’s in my bag during four-day road trips, like the one I’m on now.
In June, Netflix raised its 3-a-Month subscription from $17.99 to $21.99. I didn’t blink. I’d pay more than that in late fees alone if I rented movies from a traditional shop.
This morning, I got a $48 email from Netflix. Seems their members really squawked about the price increase, so Netflix is lowering it BACK to $17.99. Wow. That saves me almost fifty big ones a year!
Most companies raise prices. At best, they justify it with some bottom line mumbo jumbo. At worst, they raise their eyebrow as if to say, “Deal with it.” Netflix did neither. They lowered their price back down to original levels.
Of course, there’s a business case here: Netflix now has competitors. When thousands of their 2.2 million subscribers left Netflix over the price increase, it hurt their bottom line. But I bet it hurt their reputation even more. A happy subscriber will recommend Netflix. An unhappy one will not. And Netflix’s business model is based on the free but illusive word-of-mouth recommendations of passionate members.
Still, the Pollyanna in me believes that business case aside, Netflix did the right thing by listening to their members and rolling back the increase. That’s $50 more per year I can apply to another great online service about which I’m passionate: Sharbuilder.