Jul 13 2011

Netflix: My View

Published by at 10:06 pm under Entertainment,Personal

Yesterday it seems the whole internet blew up angry at the announcement that Netflix made. Today, there seemed to be a large counter action to that with Netflix sympathizers.

The whole Netflix community seems to be divided between “Netflix is money grubbing bastards” and “hey, who gives a fuck, it’s still a good deal”. I fall somewhere in between and I think a lot of people who fell under the former group are actually people who likely have a similar view to mine, but feel the need to overreact since it’s the internet.

Any one who knows me or has read this blog knows I’m into movies. I’m not quite a hardcore movie buff, but I’m definitely enjoy my movies. Over the years, I contemplated getting a netflix subscription but never pulled the trigger until they started the streaming service. I just don’t have the time to watch the movies on the dvd service. I also had concern over how much I could watch due to using the postal service as a delivery system.

The reality is I will go through spans, like now, where I’ve had Soylent Green sitting on my desk for a month. Summer is tough. And since I’m in a smaller metro area, I don’t have a distribution center in my city which means the turn around for disks is likely 4 days. Theoretically on a good month, I would get like 6 movies a month. Realistically on a good month, it’s 4 if I watch them within a day which really doesn’t make it worth it. That was worth the $2 for me. It probably isn’t worth the $8 for me.

Essentially it means I’m being priced out of this service. I’m losing something I had and enjoyed but have to say no since netflix’s decision has made this unavailable to me. It’s frustrating to lose something you have.

On the other side of this, the streaming is awesome. We got rid of our cable before we started with netflix and streaming has really made it so that very few members of the household miss it. Since we can stream 2 connections at a time, we likely stream somewhere between 20-30 hours a week. Absolutely and easily worth $8 a month.

If netflix had decided to increase streaming by $4, I would have said “Still worth it”. For me, they could have raised that $4, and raised the dvd combo by $2 and I would stay with both. At that point, $4 would be reasonable for dvd service and, as I stated, I don’t mind paying for a service that we get a ton of usage out of. That would have been the extra $6 I’m facing now and still be able to have my dvd service that I will sorely miss. I think the decisions they are making are really going to hurt their subscription numbers more than they anticipated.

I understand netflix is doing this in response to their own rising costs and they want to make money. I understand that, but as a consumer, I shouldn’t have to concern myself with their costs. It’s their responsibility to find a way to make money and this is how they have decided to accomplish that. Should people have reacted the way they did with anger? No. But I can definitely understand the frustration of being priced out of a service that you have been enjoying and would like to keep.

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6 responses so far

6 Responses to “Netflix: My View”

  1. Jessaon 13 Jul 2011 at 11:28 pm

    I’m confused… This is the email that I got about price hikes…

    Your current $14.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

    Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
    Plan 2: Unlimited DVDs, 2 out at-a-time (no streaming) for $11.99 a month

    Your price for getting both of these plans will be $19.98 a month ($7.99 + $11.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

    So I’m paying 4.99 more to keep both of my memberships. Where is the $8 hike? That would be 50% increase instead of the 33% I’m seeing…

  2. Anthonyon 14 Jul 2011 at 7:40 am

    I have a different plan (1 dvd at a time) so my numbers are a bit different:

    Currently paying: $9.99 for streaming and 1 dvd
    New equal plan would be:
    $7.99 for streaming
    $7.99 for 1 dvd
    Total: $15.98

    As far as I’m concerned for my argument, how much it went up and the percent it went up are purely academic. They are really only good for those who are on some side of the argument of how egregious the rate increase is or is not.

    My argument is to say that the new price of $7.99 (roughly $8) prices me out of this service that I was using and enjoying. I didn’t think $8 was probably worth it prior to streaming and, after having the service, I still don’t think it is on a consistent enough basis for me.

    For me, it’s entirely irrelevant that it is going up $6 for me or that it’s a 60% increase. My decision is not should I pay the current price, or should I pay the new one. It’s only if it is it worth it for me to pay what the new price will be for each service since that is how they put the pricing together.

    This is why I made the argument that I wouldn’t have complained if they raised streaming (which I think is worth more) and gave a discount for people who are going to subscribe to both services. 1 dvd at something like $4/month would be worth it. To me, the streaming service is worth more than the dvd service and wouldn’t mind paying for that. If the end price was the same, I know you could say that, but there again: my decision would be what would the new pricing be for me to get the service and not what the change of the plan was.

    It’s not like $6 more a month will kill me, but as a family of 7, we try to watch everything we spend. I guess I just have to try and look at it like I will be saving $2/month.

  3. Jessaon 14 Jul 2011 at 9:21 am

    Ok, I understand. But this is what I was confused by… just to clarify.

    “If netflix had decided to increase streaming by $4, I would have said “Still worth it”. For me, they could have raised that $4, and raised the dvd combo by $2 and I would stay with both. At that point, $4 would be reasonable for dvd service and, as I stated, I don’t mind paying for a service that we get a ton of usage out of. That would have been the extra $6 I’m facing now and still be able to have my dvd service that I will sorely miss. I think the decisions they are making are really going to hurt their subscription numbers more than they anticipated.”

    if you look at it like Netflix took the two services you were getting and split them in half (making each $5 that you are currently paying for) then they raised your streaming by less than you thought was acceptable and your DVDs by only .99 more.

    In actuality, Netflix originally offered streaming to customers as pretty much a surplus service with a very minor price increase back in the day in order to gauge customer response. So in my eyes, they’re giving me a discount on my DVDs for having both, and finally charging what streaming was worth. Because if I remember correctly 1 DVD out at a time without streaming used to be either 7.99 or 9.99. And my plan used to be 12.99 without streaming.

    I guess the reason why I have taken the time to stand up for Netflix is because I’m pretty disgusted by the lack of brand loyalty that our generation shows – which shows a lack of loyalty all around. Dissing a brand name that has given you a ridiculously good deal for YEARS and who is finally charging what competitors have been (Which is totally not what you’re doing – so props to you!!!) is kind of silly to me. We should be thanking them for their great services and for sticking by their low low prices for as long as possible IMHO. Ya know? :)

  4. Anthonyon 14 Jul 2011 at 9:59 am

    Each person’s decision on whether the service is reasonable or not is specific to each customer.

    I can’t pretend to subsidize the $8 cost of one service just because I think the other service is worth more. If I get a good deal on 1 thing, it doesn’t mean I should spend more than I would want to on something else.

    The services are split now and each customer should be evaluated as separate services. Of course, it’s their choice as consumers to care or not care about what they are spending on the service too. Evaluating the services as a combined service is only to fool one self which I don’t think people should do.

    Netflix is not showing any loyalty to their customers when they take away a discount that people have been getting for subscribing to multiple services. I don’t think I owe them any loyalty if I don’t think the service is worth the price they want to charge.

  5. Jeff Schrothon 14 Jul 2011 at 10:25 am

    Personally, my heartburn with Netflix’s decision is only partially related to their value proposition (and their apparent over-estimation of the value of that proposition – pun intended.)

    I feel embarrassed that I’ve actually been a vocal advocate for Netflix for many years, since I based that support on my thinking they “got” how I believe companies should/could evolve as the Internet delivery channel inevitably supplants a significant portion of the space previously filled by “land-based” channels.

    I misinterpreted their essentially giving away the streaming service to existing DVD customers when they developed the technology (it was totally free to me when they first made it available) and them having deployed access points in as many different devices as they could find (not just dedicated devices like Roku, but also built into TV sets, Blu Ray players, even home theater devices of various kinds.)

    I assumed they planned to continue to nurture their core business – DVD rentals by mail – but also begin charging a surcharge for the Internet delivery channel once they a) had a critical mass of users, and b) improved the library of available movies/shows into something better than the discount barrel at your local Blockbusters.

    Instead, it turns out their plan (as now described by them) was to REPLACE the DVD/land-based channel with the Internet delivery system. I don’t think that is actually currently feasible (see: average level of bandwidth available to Americans) – but if it is, it most certainly requires a significant improvement in the quality of the streaming library they offer. The streaming library would need to closely correspond to the DVD library, wouldn’t it?

    Instead (in case you weren’t aware) they’ve actually REDUCED the titles available in the streaming library over the last several months, and have been adding titles much longer after their theatrical releases than used to be the case. The conjecture is that they’ve hit some kind of impasse with the studios/MPAA et. al. (who, along with the backbone-level ISPs are undoubtedly the real meta-culprits in all of this.)

    So, a company that I thought I understood and respected for their “sophisticated” intentions turns out to have what I consider to be a faulty business plan and is deploying it using some of the worst customer and public relations techniques I can imagine. (Netflix CEO Reed Hastings, your handlers and stockholders called and wanted me to tell you, “Sit Down and Shut The Hell Up!”)

    My decision about what to do come September 1st will be based solely on the math now. Some combination of Hulu/Hulu+, Amazon Prime/On Demand, and YoutTube, etc., etc., may be a better choice than Netflix, now – and I have exactly the same level of access to those services, on the same devices, as I have/had with Netflix.

    I cannot imagine how the (imaginary) dollar signs got the Netflix brass to decide to give up their unique position in the marketplace. It embarrasses me that I thought they were smarter than that.

  6. Aprilon 14 Jul 2011 at 2:45 pm

    For us the benefits out weigh the cost. We don’t have to drive across Fargo for a decent movie rental or argue about who is taking it back before we get charged a late fee. And usually by the time we decided to get a movie, the one we wanted was never in stock. Besides netflix is still cheaper for us at $15.98 than renting movies, at least here in Fargo it is. Since Fargo has a distribution center, our turn around is about 2 days.

    We currently get 2 dvds at a time unlimited, but rarely watch them on back-to-back nights. Obviously we get more movies watched during the winter rather than summer. So we decided, we will move to 1 dvd at a time, unlimited plan and keep the streaming (that we have really grown to love!!) And in the end it is still the exact same $15.98 I pay now. Or maybe we will do 2 dvd at a time in the winter (depending on if their Instant Play list grows or not) and decrease to the 1 dvd at a time during the summer months.

    I am really curious to see how this will affect their number of customers.

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