Netflix Price Changes
As a netflix subscriber from the very beginning (as well as a stock holder) I will switch to a less expensive plan. Right now I’m paying for lots I don’t use, but the price was fair, and I like the options.
The quality of “streaming” on an ipad- not good when I tried; the quality of streaming on lap top or via netflix ready TV/ have not set up the TV for that and have not watched many movies on my laptop… did want the opportunity to do so, which is why I have the unlimited streaming/ 3 dvd’s at a time plan, which started as 3 dvd’s at a time. I’ll keep the option for mail dvd’s and streaming, but I’m not willing to pay the extra…
I think Netflix should have been kinder to long term faithful fans who stuck by them during the days when blockbuster was king…
How many would choose just 1 ?
A revenue change was inevitable, either to satisfy investors or Big Hollywood.
I think investors are very satisfied. Netflix’s stock has increased faster than Apple’s in the past 2 years, going from 20 to about 300 now in the two years (versus 120 -> 360 for AAPL).
I think the revenue change will only hurt them. There are alternatives and there’s no reason for the raise. I’m looking for alternatives. Any suggestions?
I already told my kids that we have to cancel the downloads. I am in the middle of watching Breaking Bad. When I finish the series I am canceling the disks also. We already have HBO, and Showtime so Netflix is really not necessary for us though though my daughter loves the downloads.
I currently have the 4 DVD + stream plan, which is only going up two dollars from $27.99 to $29.99. So the rate hike is not really hurting me that much, but I don’t like it on principle.
As it currently stands, I am a busy enough guy that I don’t always have time to sit and watch X content. When I don’t simply stream, I tend to get DVDs in queue, save them to a hard drive, and watch them later, on a night when the kids are in bed and I am too tired to work on a project and my wife hasn’t already turned in, etc. IANAL and I’m not suggesting that you should make your legal decisions based on this, but IP attorneys I trust have suggested to me that, thanks to timeshifting being held as clear fair use in Sony v. Universal back in the 1980s, as long as I maintain a Netflix DVD account, I can save whatever I want and watch it later after receiving it in queue. After all, the content was delivered legally, the requisite parties have been paid, and exactly when (if ever) I actually sit and watch is essentially irrelevant. It is, mechanically, exactly the same as taping or DVRing a broadcast for later consumption.
With bandwidth caps looming and usage pricing coming into vogue, I think I may just decrease my account down to one DVD (and I’ll go ahead and up the two bucks for blu-ray) and cut streaming entirely. Ultimately, I’ll be able to watch everything on my own time, as long as I don’t need it NOW RIGHT THIS MOMENT, and it appears 100% on the up-and-up. If the content producers don’t like that because of their control fetish, they need to do something about cost and availability, and I will gladly return to the world of streaming on demand just like they want.
Paradoxically, if Netflix was something like iCloud and you just had all content available all the time for streaming for a monthly fee, and the bandwidth cap issue wasn’t waxing so prominently, there would be no reason to save any content locally, and I think most people (including me) would leap at the chance to move away from local storage and networking hardware and maintenance. My kids are the primary consumers here, and the last thing I need is the hassle of tollboothing them on usage, or at least feebly attempting to do so.
I think my views are a little out of sync with the consensus of the comments that I’ve read here.
I think Netflix’ SHORT term future will be just fine.
It’s their LONG term future I’m worried about.
As a subscriber, we found the streaming kind of neat. We really want to watch new movies that we may have missed at the theatre, so these aren’t really present here. Their rental plans are a little too steep for us when we can just walk down the block and pick up a dvd at redbox. We probably rent about 5 dvd’s a month, so that’s cheaper than Netflix. At this point, we will cancel the dvd option on our plan, but we may keep the streaming. Plenty of old series and kid movies for the kidos to watch.
Their rental plans are a little too steep for us when we can just walk down the block and pick up a dvd at redbox.
That’s what I’m thinking. People who watch a large quantity of movies and include an obscure selection may find it hard to give up NetFlix… but for me $16 per month is a no go.
I don’t watch 16 movies a month, period, counting things I stream, rent or own. Personally it would be cheaper to drop NetFlix entirely and only use RedBox.
Besides, I already had Amazon Prime for fast shipping, so I effectively have their entire library available “free”, since I was paying for the service anyway and it costs no extra to watch the streaming movies they have.
One thing I haven’t seen mentioned in all the discussions about the reason for changing the price is mailing costs. As someone who has regularly worked in businesses shipping products, I can tell you mailing costs are huge. They can quickly eat profits, and they take a lot of time and effort to squeeze into a budget (using special rates, weighing very carefully, packing a certain way, choosing the shipper carefully). Frankly, I often wondered how Netflix could offer as many DVDs as you could watch in a month shipped to and from your door at just a couple dollars over streaming cost.
So, the separation of DVD and Streaming into two entities doesn’t really surprise me, nor does the resulting price increase.
However, just as Netflix can crunch numbers and come up with what they think is a fair price and what they need to maintain a viable DVD shipping business, I can crunch numbers and decide if it’s more cost efficient for me to goto the local video store and rent my discs. My local store happens to rent DVDs and BluRays for the same price—they vary price on how new the release is. Since my time for watching discs lately has been limited, I can’t justify more than a couple dollars a month—and the local store with 99 cent DVDs and BluRays for a one week rental works just fine for that.
I’ll keep the streaming for now, but the one-DVD-out-at-a-time option I have now will go away come September 1.
"Now that you’re dead, your usefulness to me
has ended! But I’ll keep your shoes. BWAHAHAHA"
—The Lightning Bug, J-Men Forever (1978)
Good point, Dean. However I think if they need to raise prices due to shipping costs, it might be the beginning of the end for DVDs by mail.
Personally I’ve really never understood the appeal of ordering discs by mail. If I want to watch something, I want to watch it now. I want to stream it or go grab it from Redbox. By the time it arrives a few days later I may not even care to see it anymore.
So… charging more is just the nail in the coffin, in my opinion. Mail order discs already had limited appeal and now it has even less.
I think expressing it as a percentage increase exaggerates the actual impact, because a big percentage increase in a small amount of money is still a small amount of money. For me, the difference is 6 bucks. In the past, I’d often end up paying that much to Blockbuster for a single movie with a day or two late fee tacked on. Add the convenience of disks by mail and streaming, and the fact that together they give me access to almost every US show there is, I still feel like I’ll be getting a good deal. If the extra income helps Netflix to enlarge their streaming library, it will be a very good deal.
Previously, if you got one plan, you got the other one essentially for free. This made sense as a promotion when Netflix streaming was just getting started, and licensing costs for Netflix were low, but these days both types of service impose substantial costs upon Netflix, so it makes sense that Netflix has chosen to charge separately for each.
In the long run, I think this is a good thing, as it indicates that Netflix is planning to continue the disks-by-mail business, which I still value for the completeness of the library, instead abandoning it altogether in favor of streaming.
I am ditching Netflix all together. The streaming has gone downhill. I will go to Blockbuster Online for $11.99 a month. I get one DVD at a time, which is slightly more then Netflix. However, you get newly released DVDs at Blockbuster immediately, and you can trade the DVDs in at a Store.
I have a great library by me that has a good selection of movies. Certainly, most of the one’s Netflix would stream. I have four sitting next to my TV now. I can have them for free for a week. Further, Hulu Plus has all the TV shows I could want. RedBox is also an option with the added benefit of having games for the X-Box.
My Netflix plan would double. Coupled with Netflix already increasing it’s prices on my plan less then a year ago, it is time to change. I would have accepted a dollar change, which would have been ten percent. Fifty percent, no way.
I don’t like constant tinkering of the plans and prices. Give me a fair price that allows you to be profitable and keep it at that for a while. Changes you’d be greater then the cost of inflation.
Blockbuster online. Hulu. Redbox.
There are alternatives and there’s no reason for the raise. I’m looking for alternatives. Any suggestions?
I’m very amused that investors think a rate hike of that magnitude is automatically a good thing.
If I had some extra spare change, I would look into buying puts on NFLX…someday.
Just did, NOW.]
September 270’s PUTS
Tan, you should be smiling from ear to ear today.
Netflix abandons the floppy drive at AppleOutsider
How will it play out in their upcoming license re-negotiation with the studios?
Netflix abandons the floppy drive at AppleOutsider
I totally agree. Almost nobody here is talking about the opex. What if they know that the combination of lost subs from people leaving and/or going streaming only is going to net out higher? And maybe they are refining their investments in streaming and datacenters where as they might have been getting screwed over in the physical media. I don’t know enough about nflx but I bet their plan with this is in their conf calls and balance sheet if you look carefully enough.
Something tells me they have done this analysis and are comfortable with it, and the stock market appears to have agreed.