Family Video stores of Marquette and Negaunee offered a promotion valued up to $9.95 to both new and existing members who brought in an email notice of their Netflix cancellation. The promotion took place from Oct. 1-8.
Barbara Lynaugh, store manager at the Marquette Family Video, said although the offer was not highly promoted, about 12 customers participated.
Once it was established that the customer was no longer a Netflix member, they were given a $5 credit.
Customers could then apply their store credit to a discount movie rental card, originally valued at $9.95.
Family Video would then waiver the additional $4.95. Customers with a discount movie rental card receive half priced rentals for 30 days.
“Netflix has made recent decisions that upset a lot of their customers,” Lynaugh said. “We thought it would be a nice thing to do to get customers renting with us.”
Family Video in Marquette has had an increase in customers since Netflix applied price changes in September, Lynaugh said.
Netflix announced a rise in prices through an email to its members in July 2011.
The original membership price was $7.99 for unlimited streaming and one DVD out at a time.
Netflix split the two services, charging $7.99 for either unlimited streaming or one DVD by mail.
Members who did not wish to change plans had the option to keep unlimited streaming and one DVD at a time for $15.98 a month. The changes were to be put into effect September 2011.
The company sent out a second email to its members on Sept. 19, apologizing for the way the price change announcement was handled.
The email then went on to explain that each service was going in its own direction and CEO Reed Hastings felt as though the two services should be split.
Because of the services splitting, prices would need to be increased.
“We realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently,” Hastings said in the email.
After explaining the reason for the changes, members were then notified in the email that the DVD service was going to be renamed and a second account would be created to manage that service.
Members with the streaming and DVD package would have two separate accounts and each would be billed separately.
According to the email, the DVD service would be renamed Quikster and the streaming service would remain as Netflix.
On Oct. 10, Netflix members received another email stating that because of the upset the name change had caused, both services would stay as Netflix and members would only need to manage one account.
The email also clarified that the new prices would remain the same.
The Netflix stock price has fallen significantly after the price increase announcement, according to Google Finance.
On July 13, 2011, the stock finished at its all time high of $298.73 per share. On Sept. 20, the stock price finished at $130.03 per share.
The lowest the stock finished was $108.66 per share on Oct. 11. The stock prices are still low, but have steadied since the initial fall.
The changes Netflix has undergone have not only affected the stock activity, but also the experiences of its members.
Ed Gibbs, a senior English writing major, had been a member of Netflix for approximately three years before cancelling his membership.
“I was content with Netflix before the price changes,” Gibbs said. “But when the price changed, I had to make a decision and I just decided to get rid of it.”
He was subscribed to the package allowing him to have two DVDs out at a time plus streaming.
Although he used the DVD service more frequently, the streaming options were supplemental while he was waiting for the DVDs to come in the mail.
Once the price went up for each service, he decided his membership was not worth the price, since he didn’t watch movies often enough.