Netflix Customers Jam Phones on Higher Prices, Analyst Says
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Netflix Inc. (NFLX)’s telephone lines were jammed by customers complaining about a 60 percent price increase for the company’s online and mail-order movie rental services, a BTIG LLC analyst said.
Of 35 calls BTIG made to Netflix over a couple of hours today, 15 went through, Rich Greenfield of New York-based BTIG said in a report. He cited wait times of 9 minutes to 15 minutes.
Netflix, citing the costs to acquire and deliver films and TV shows, said yesterday that the $9.99-a-month package of DVD- by-mail and unlimited streaming for U.S. customers would be split into two services costing $7.99 each. When customers threaten to cancel, operators suggest waiting until the price increase takes effect in September, Greenfield said.
“There was simply no promo or ‘save’ technique to offer us a discount to retain our business,” Greenfield wrote. “This would appear to illustrate that Netflix is simply not concerned with the prospect of losing customers.”
A minority of consumers say they’re happy about the billing change because they’ll save money by only paying for DVDs or streaming, he wrote, citing conversations with service representatives.
Netflix’s call centers have been operating at peak capacity since yesterday, Steve Swasey, a spokesman for the Los Gatos, California-based company, said in an interview. He wouldn’t say how many customers are canceling because of the higher prices.
“We’ve been getting tremendous caller volume today and yesterday,” Swasey said. “Some will leave and some of those will eventually come back. It’s still a great value.”
Netflix gained $7.46, or 2.6 percent, to $298.73 today in Nasdaq Stock Market trading. The shares have climbed 70 percent this year.
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