Netflix, Inc. Sued For Raising Subscription Fees

Netflix, Inc. Sued For Raising Subscription Fees

Netflix is now being sued for raising the price of the services it offers. A subscriber who was led to believe he would be grandfathered in under Netflix’s $7.99/month plan recently filed a class-action lawsuit against the streaming firm for raising his monthly rate to $9.99, reports The Hollywood Reporter.

Questions over ‘grandfathered in’ clause

George Keritsis is suing the streaming firm for breach of contract. Keritsis hopes to secure a class-action certification for the lawsuit.

“For a period of time, Netflix solicited persons to subscribe to Netflix’s streaming service by guaranteeing that Netflix would not increase monthly subscription prices as long as the subscribers maintained the subscription service continuously,” the complaint says. “Netflix has broken its contract with these subscribers by unilaterally raising monthly subscription prices.”

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Keritsis claims he came across an ad promising a guaranteed $7.99 monthly subscription price. He even called Netflix to confirm this and was ensured by a telephone representative that the fee would be “grandfathered.” Based on this, he subscribed for the service.

In October 2012, his rate was increased to $8.68 per month. Then in June, he received mail from the company informing him that his “special pricing” is ending, and the new price will be $9.99 per month. The email included a phone number for those with questions, so Keritsis called.

“The Netflix representative stated that he could see Plaintiff’s account was ‘grandfathered in,'” the complaint reads.

When Keritsis opposed this, he was told that the price increase is for all grandfathered accounts.

Is Netflix worth the money?

Not many would agree that a $2 increase is annoying. Netflix’s deal is still better than what Hulu charges for its commercial-free streaming tier. Netflix is worth the money for the majority of movie lovers. Apart from growing its quality original programming, the streaming firm has been widening its movie and TV content too. Though its content library is 40% smaller than what it was four years ago, the quality of the content is surely much better.

Continuing to come up with original content and signing licensing deals with Hollywood studios is not cheap. This forced the streaming giant to raise its prices over the past few years, even for loyal subscribers.

As of now, there have been no comments from Netflix about the lawsuit.

On Thursday, Netflix shares closed up 0.46% at $91.48. Year to date, the stock is down almost 22%, while in the last year, it is down almost 2%.

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