Erica Stevens has what i think you are referring to in "The Survivor Chronicles". Every Monday she posts a chapter for free on her blog. Once she is done with the book, she takes it down and puts it together and then sells it as a book. Not only do I read her blog every Monday, i have bought the first two and will buy the third when it comes out. Here is a link to her blog, check it out and see what you think: http://ericasteven.blogspot.com/

I was reading HM Wards Arrangement - $2.99 per book when I was reading it. I think I stopped at number 4 out of frustration at the price and the amount of books that were being released in the series.
Currently there are 12 published - at $2.99 per book it comes to $35.88 so far.
Its just too pricey and there's barely anything to each book.
Personally it really feels unfair and like a money making issue. I like books priced up to $3.99 and when I say books I mean full length novels - but if the book sounds really good or is from an author I love I'll pay up to $10 per book. Even if it's a 3 part series at $10 each.
I don't like when its promised as a certain length - say 3 books - but then extended to 5.
I'm not a huge fan of cliff hangers either. I do like cliff hangers but hate waiting for the next book, so if a series is coming out with a cliff hanger I will wait until all the books are out so I can read them straight through.
Thats just me though :)

Serial novels are very frustrating for me.

I admit I feel like I'm being "nickle-and-dimed" on them.... $0.99 is probably the most I'll pay from here on out, and I still feel... "cheated". Like if I'd just wait for the whole book to come out it'd cost like $3.99 or something, but in installments I'll end up paying a lot more than that.

But you're right. It's not just the cost - it's exhausting because the story usually DOES go on too long....

and then there's the wait... if I have to wait a few months to a year for one of my favorite authors to release a new work in a standalone or a series, at least I feel like I'll get a full story out of it. There's usually "enough" closure even in (traditional) books with cliffhangers to hold me over until I can find something else to read.... True, serials reduce the wait time til something else comes out - but it's incomplete and far less satisfying than a full-length story.

Chronic waiting is the most exhausting of all.

Have you read some of H.M. Ward's reviews for "The Arrangement" quite of few people are very angry with the short segmented serial concept. I being one of them. I understand that as an author the profits from this type of book are very tempting. However I would tell you that a lot of readers are very fed-up and angry about this type of book. In my opinion it makes the story too drawn out, to the point that you feel MANIPULTED. Especially when each book cost $2.99 (The Arrangement) and just ended suddenly with a cliff hanger. And even after all are purchased, since they are so short, the story feels like it is missing important details or depth. Which makes this type of writing both frustrating and annoying to the reader. I would tell you "Don't Do It" please.

I am currently awaiting The Arrangement 13 by H. M. Ward. I actually like the theory of the short segmented books as long as it doesn't go overboard. I will say if you look at H.M. Wards reviews you will see some that are not happy with the length of the story and not the concept. I will say in her defense that She asks her fans via FB survey after ever segment is released, if they are ready for it to end and general consensus in a big fat NO. Granted not all 32,000 followers are all weighing in, but a great deal are.