Netflix Changes Pricing Model–Are You Outraged, or Resigned?


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Netflix Changes Pricing Model--Are You Outraged, or Resigned? Listen to this article

Netflix Changes Pricing Model--Are You Outraged, or Resigned?


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I guess it’s like the old truism: it depends on how you look at it.

Yesterday, Netflix announcing a new pricing plan.  Here’s how the Netflix marketing folks put it to me in an email:

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $17.99 a month membership for unlimited streaming and unlimited DVDs (including Blu-ray access) will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs (including Blu-ray), 2 out at-a-time (no streaming)
for $14.99 a month

Your price for getting both of these plans will be $22.98 a month ($7.99 + $14.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

On the one hand, anyone who didn’t see the writing on the wall late last year when Netflix added a streaming-only option, while raising prices on every other option,  to their menu of choices was fooling him or herself.  The first thing I thought when I saw that announcement last year was, “Yup, they’re trying to phase out the DVD mailing end of the business.”  Which makes sense from a business perspective, right?  Which is cheaper; keeping thousands (millions?) of DVDs in various warehouses all around the country, and paying all that postage to ship them back and forth?  Not to mention the costs for the envelopes, and whatever people and equipment are required for running that business.  Or just having a massive bank of servers and a team of IT people, and beaming out electrons on demand?

I mean, really, it seems pretty obvious.

On the other hand, the hard facts are that if you have a one DVD at a time plan and want to keep it, you just saw your price jump by 60%!  And if you have a two disk at a time plan, it jumped by 33%.  No matter how you slice it, those are enormous price jumps.  I have seen a lot of outrage about it on various boards, along with a whole bunch of folks insisting that the outraged people have no sense of perspective.  But my side is on that of the outraged, personally, for two reasons:

First, a huge price hike is a huge price hike, period.  Particularly in the face of a really, really crappy economy.  “Nibbled to death by ducks;” “being nickled and dimed to death”; “death by a thousand cuts”; and other cliches jump to mind.  Yeah, yeah, yeah; what’s six bucks a month, right?  I’ll tell you:  it’s another six bucks!  Your wages are flat, and have been for decades; gas is up over 4 bucks a gallon; the banks are dinging you for every friggin’ fee they can think of; cell phone companies are thinking up phantom fees; and one of your avenues of entertainment is going up by 60%?  Jeebus, what else do they want; my blood?

Second, the current selection on Netflix streaming is less than optimum.  This is anecdotal, obviously, but it seems like every time I want to watch a movie via streaming, it’s only available on DVD.  Yesterday I thought it might be fun to re-watch “Annie Hall”.  Nuh-uh; DVD-only.  Okay, maybe a heist movie, like “Ocean’s 11”?  Nope.  TV show like “Cowboy Bebop?”  Sorry, mate.  I finally found “Accidental Tourist”, but I swear to you I had to go through quite a few other choices first to get there.  (“The Italian Job”? Nope.  “Casino Royale”?  Nope.  “The Bourne Ultimatum”?  Nuh uh.  “The Transporter”?  Sorry . . .) No, it’s like cable all over again–it’s not what you want, it’s what they make available.  And so far, Netflix [or the movie studio] hasn’t made it available.  (And what is the logic behind having one film of a multiple film series available, but not the others?  Nutty!)

(I’m not even going to go into the endless trouble I’ve had getting decent quality on my streaming movies.  If I watch them on anything other than a laptop, they look like crap, and that’s a fact.  At home, on the road . . . it doesn’t matter.  And I’m not going to watch something that looks like crap when I can rent a blu-ray and have awesome quality, nosir.)

So:  Netflix is raising their prices.  A lot.  What do you all think about it?

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