Video & Audio|August 30, 2011| Author: Kim LaCapria|Tags:

Netflix Price Hikes Take Effect Thursday

Streaming and DVD service Netflix announced last month that price increases roundly criticized as excessive and unfair would be going into effect, and the hikes are set to take place on Thursday, the first week of September.

It will be interesting to see how the plan shakes out for Netflix, which has pretty much single-handedly taken down big chains like Blockbuster and Hollywood Video- perhaps with a bit of help from DVD kiosks such as Redbox. With its hooks firmly planted in the market and a decreased number of alternatives for consumers, rates for users are set to go up as much as 60% depending on the user selected rental plan.

Under the previous plans, Netflix subscribers were able to partake in both physical media rentals and utilize the streaming service for about $10 a month. Now Netflix is splitting the plans, with the combined cost coming out to about $16 a month. Informal polls have yielded a 40% result for users claiming they’ll abandon the service when the rate hikes come into effect, but the idea subscribers will cancel in droves has been widely rejected as a likely outcome.

What’s more likely is that the move will hasten the death march of the DVD rental market as users switch over to streaming-only with far stronger incentive. Of note however, is that the company could garner some dissatisfaction with customers who have not gotten the rate-hike memo- combination streaming and disc rental customers will automatically be greeted with the upcharge on their September credit or debit card statement.