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Audio: Netflix Says Expected Some Customers to Leave Over Price Hike; Analysis of the Move

| July 14, 2011
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The infamous Netflix price hike was discussed today on KQED Radio’s Forum program. The show is archived here.

The Los Gatos-based company, which in the past has generated much joy at the mailbox from people who like movies or just receiving mail in general, is now in the midst of a full-blown consumer backlash. How full-blown? Well, there are 58,000 62,000+ comments on the Netflix Facebook page under the company’s announcement, and very few of them say, “I understand completely.” (Though about 1,100 people did hit the “Like” button, perhaps those who will opt for the reduced-price for DVD-only or streaming-only.)

Forum host Michael Krasny asked Netflix VP of Corporate Communications Steve Swasey today to respond to all the criticism.

“Why do you think all the angry outrage?”

Netflix is not surprised by the response. Netflix does nothing without testing it, without researching it, without analyzing it.

“There is a lot of response on Facebook and through the Netflix blog and to Netflix executives, myself included, getting a lot of calls. Some people don’t like change, and some people are concerned about what they perceive as a price increase. What we are trying to convey is that this is an improvement in the Netflix service.”

Swasey also said, “Netflix is not surprised by the response. Netflix does nothing without testing it, without researching it, without analyzing it. So we did anticipate a certain number of members who would be disappointed and would leave the service. We’re not saying what that number is yet, we will disclose that in our earnings call later.”

Listen to the full interview with Netflix VP

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Also discussing the pricing move today were Sam Grobart, personal technology editor for The New York Times, Farhad Manjoo, tech columnist for Slate.com, and Michael Olson, research analyst for Piper Jaffray. The general consensus is that the change is designed to move consumers to streaming over DVDs.

“Streaming is going to be the wave of the future, and this certainly accelerates that,” said Grobart.

Great. I’m still waiting for Laserdiscs to come back.

Discussion and analysis of the Netflix move

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Category: Arts and Culture, Economy, Technology

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